Eat What Is On Your Plate

Jun 22nd, 2009 – Comment

Is it worth keeping Talisman for another year ? Lot’s of sizzle, no beef. Thanks, Haig Toronto Hi Haig, It is always a good practice to ask when is enough enough? I would say that if you are looking at the move from the March 2009 lows for Talisman Energy ( TLM TSX)  you have […]


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Is it worth keeping Talisman for another year ?kobe1
Lot’s of sizzle, no beef.
Thanks,

Haig
Toronto

Hi Haig,

It is always a good practice to ask when is enough enough? I would say that if you are looking at the move from the March 2009 lows for Talisman Energy ( TLM TSX)  you have a nice piece of Kobe beef right on your plate. Whether it will still be as tasty in a years time will require some work.

Talisman has been in transition since the retirement of their former CEO Jim Buckee. Current management under President CEO  John Manzoni has been focused on shedding non- core assets, building value in unconventional gas plays in North America, maximizing  its production from the North Sea, and pushing exploration in Southeast Asia.

tlm1

 

The chart shows resistance at $18 which halted the advance from the March lows of $10.

There is a thin ledge of support at $16 which the stock has to hold onto to make a case for a continuation of the advance.

Talisman has cut its 2009 and 2010 exploration budgets to conserve cash until energy prices stabilize. The company has a liquidity cushion of $3B which it can access when the environment justifies more spending.

 

 

 

 

 

 

 

tlm2

 

The MACD  on the 6 month chart signaled a sell off as we came into June and a test of the support off the 50 day moving average. Another indicator that causes concern is the trend line that supported the move in March has been breached.

Talisman has provided a nice feed in the last 90 days and unless it can hold onto support at $16 I would say it might be time to take a nice walk after a fine meal to help as you digest your profits.

 

Happy Capitalism!

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