From: canslim-owner@xmission.com To: canslim-digest@xmission.com Subject: canslim Digest V1 #101 Reply-To: canslim@xmission.com Errors-To: canslim-owner@xmission.com Precedence: canslim Digest Friday, 28 February 1997 Volume 01 : Number 101 In this issue: RE: [CANSLIM] PLEASE, PLEASE, PLEASE HELP!!!! [CANSLIM] The (NASDAQ) Market Re: [CANSLIM] beta testing Re: CTN (was re: [CANSLIM] ADEX) Re: [CANSLIM] The (NASDAQ) Market Re: [CANSLIM] USRX takeover by 3COM. Re: [CANSLIM] USRX takeover by 3COM. re: [CANSLIM] The (NASDAQ) Market re: [CANSLIM] USRX takeover by 3COM. Re: [CANSLIM] USRX takeover by 3COM. [CANSLIM] Cups and handles Re: [CANSLIM] The (NASDAQ) Market Re: [CANSLIM] USRX takeover by 3COM. Re: [CANSLIM] USRX takeover by 3COM. [CANSLIM] Fw: Site that graphs PE's See the end of the digest for information on subscribing to the canslim or canslim-digest mailing lists and on how to retrieve back issues. ---------------------------------------------------------------------- From: Joseph Vaughn-Perling Date: Thu, 27 Feb 1997 13:53:34 -0800 Subject: RE: [CANSLIM] PLEASE, PLEASE, PLEASE HELP!!!! - ------ =_NextPart_000_01BC24B5.A36FB9A0 Content-Type: text/plain; charset="us-ascii" Content-Transfer-Encoding: quoted-printable In case majordomo didn't get this to you the first time: Please do not submit DG-online bug reports to this mailing list, instead = continue to send them to techsupport@dailygraphs.com (if it is a = problem) or info@dailygraphs.com (if it is a suggestion) as they will = get direct and immediate attention. This mailing list is not = "officially" monitored by William O'Neil staff. We are members in this = list as private individuals not in any official capacity. BTW: I'll pass your comments on via interoffice email this time but = please (please, please ;-) don't bother the folks here with the beta = test problems because 1) the folks who are in charge of the beta test = don't monitor this list. 2) I don't want to make it my job to be a = liaison between the few betatester who happen to be on this list (most = by far are not) and the beta test proctors. 3) This mailing list is for = C-A-N-S-L-I-M discussions and is not owned, operated, or affiliated with = William O'Neil or his companies. Thank you for being understanding, and I apologize to the list for this. - -----Original Message----- From: James B. Andrews [SMTP:jba@primenet.com] Sent: Monday, February 24, 1997 12:24 PM To: canslim@xmission.com Subject: Re: [CANSLIM] beta testing Attn Chuck Wilmot The following is what I sent to DG about the changes... $$$$$$$$$$$$$$$$$$$$$$$$ I just subscribed on a monthly basis... I found some problems and some suggestions... - -----Original Message----- From: James B. Andrews [SMTP:jba@primenet.com] Sent: Thursday, February 27, 1997 6:58 AM To: Techsupport; canslim@xmission.com Subject: [CANSLIM] PLEASE, PLEASE, PLEASE HELP!!!! You at Daily Graphs ask us to beta test and we want to but you make it = VERY difficult to do...=20 For instance, how do I know if I should d/l a new version of the program???? The d/l area on the web does not tell us what version and = the date that is ready for d/l... This morning I have tried twice to d/l the program and twice I was unable to complete the d/l and it was >not< my = ISP that held up the d/l...=20 PLEASE, PLEASE, PLEASE HELP US!!!! =20 Send a e-mail to each of us that are beta testing and let us know when = to d/l,,, OR,,, send a e-mail to this list and let us know,,,=20 JUST COMMUNICATE WITH US!!!!! 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So here it is again. Seems like it takes 2 or 3 tries more and more for me to get through. Anyway ... FWIW - the NASDAQ closed below its 50 dma today convincingly. This is the first time that has happened since 6/18/96. Additionally, the divergence continues, with the NASDAQ significantly underperfoming the DOW and to a lesser extent the S&P 500. Finally, we have been back and forth on this list about whether we got back into rally mode based on the DOW's 1% up day a week or so ago. I still don't know. But if we look at the NASDAQ chart in isolation, we know it never has had a 1% followthrough day since the reversal on high volume it experienced at 1400.53. Based on the chart from O'Neil's seminar, as an example, and counting rally failures since the reversal day in the same way he did, I come up with 4 sell signals (rally failures). Take a look at the IBD chart for the NASDAQ and see what you think. Remember to make your own decisions. Newbies to this list should know that I called a DOW TOP back in November, following which we had a 10% rally. So I am not necessarily the best technical analyst of the market as a whole. OTOH, I have learned quite a bit since then. Just some thoughts. ------------------------------ From: "tom worley" Date: Thu, 27 Feb 1997 21:33:24 -0500 Subject: Re: [CANSLIM] beta testing How do you volunteer for the DG beta testing? I'm willing to give it another try, maybe I just don't know how to volunteer right after too many years in the military? tom w - ---------- > From: Charles A. Wilmot > To: canslim@xmission.com > Subject: Re: [CANSLIM] beta testing > Date: Thursday, February 27, 1997 8:42 AM > > James, > > I read, with interest, your comments re: DG Online. I, too, volunteered to > beta test this program very recently and was accepted ------------------------------ From: "tom worley" Date: Thu, 27 Feb 1997 21:29:21 -0500 Subject: Re: CTN (was re: [CANSLIM] ADEX) Had I not stopped him briefly, he would have owned CTN at 14.5, then had to sweat two days of halted trading with all indications looking at 6-8 if/when it reopened, then bled when it opened at 3.5. And this is a broker who has gone blue chip, conservative, long term. And it was for a single client yet. Better than a $20K loss in seconds! Ouch!!! I think you are on to something with your gullibility factor. The new SEC Internet Task Force must be having fun (and a lot of laughs too, I hope). What is really sad about this one is that CTN was NYSE's #1 stock for 1996, up about 456% I think, and here two months later, it moves tomorrow from NYSE to the Bulletin Board. I hope a lot of people go to jail for this. AMEX won't touch it, NASDAQ won't touch it. I wonder if they can even find a decent auditor to audit them and restore some believability to their financials. tom w - ---------- > From: Michael A Langston > To: canslim@xmission.com > Subject: CTN (was re: [CANSLIM] ADEX) > Date: Thursday, February 27, 1997 9:12 AM > > tom writes: > > > My good deed yesterday was delaying a broker who is usually > > smarter from entering a mkt order to buy 2000 CTN... > > > in that 30 seconds or so the trading was halted. > > > I try to look after my better brokers, esp when they are > > doing a Garzarelli. > > i'd say that one was better'n a mere Garzarelli tom, > maybe even a Garzarelli-plex -- sheesh, i was assuming > the "gullability indicator" (remember IDID) was limited > to the uninitiated! > > mike ------------------------------ From: "tom worley" Date: Thu, 27 Feb 1997 22:03:06 -0500 Subject: Re: [CANSLIM] The (NASDAQ) Market Craig, I think the evidence is weighing in more and more on the side of a correction. Don't think it will be severe, probably no worse than the 8% ones we have had. The SPX trailing PE now is not very far ahead of where it was a year ago, short interest remains at a record (meaning a lot of buying power on a correction), "job possession" confidence is growing which may lead to wage inflation, altho there is increased job ads which may mean more difficulty in hiring or may signal further growth. On the other hand, the rate of growth, despite this latest fantastic earnings cycle, appears to be slowing. I give it no more than about 60 days before the "fear of recession" is common talk amongst the media. But I also can see some signs of a Fed rate hike, not in the March meeting, but not long after that. Timing could be terrible, as we hit the summer doldrums. BTW, finally got an explanation for the "Mitsubishi repatriation of their dollar based assets iinto yen". Seems the Japanese corps are all taxed as of March 31, and apparently the tax is higher on non-yen assets (seems like a smart idea actually). So major corps put money back into yen, at least short term. Downside is that this comes at a time when the US bond mkt is already weak. And we know where the stock mkt goes when the bond mkt heads south. Damn, I did it again. Just when Garzarelli goes bullish, I start getting cautious. I'm not a bear, long term she may actually be right, but her timing is terrible. Today's over 2% drop on the NASDAQ Composite was pretty compelling. I had called for at least a flattening helped by the USRX/COMS deal. Well, the Wed aftermkt signals were certainly all wrong. COMS went south from the open, and interestingly got an upgrade from one house and a downgrade from another. I think the signal here was that it was a stock swap deal, with COMS surviving, thus the future value of COMS dictates the value of the deal, and networking groups are doing poorly. A point, this deal keeps USRX ahead in the ultra fast modem race, and appears to permit the combined companies to wipe out the leads existing by ASND and CSCO in their respective niches. Since the merger ratio is 1.75 shares COMS for each share USRX, any tanking by COMS should be exaggerated in USRX, and may induce me to jump into USRX. A little analysis of projected earnings on the two separate cos suggests a strong combined earning later. If it can also take mkt share from CSCO and ASND in the process, could be interesting. tom w - ---------- > From: Craig Griffin > To: canslim@xmission.com > Subject: [CANSLIM] The (NASDAQ) Market > Date: Thursday, February 27, 1997 8:25 PM > > FWIW - the NASDAQ closed below its 50 dma today convincingly. This is the > first time that has happened since 6/18/96. > > Additionally, the divergence continues, with the NASDAQ significantly > underperfoming the DOW and to a lesser extent the S&P 500. > > experienced at 1400.53. Based on the chart from O'Neil's seminar, as an > example, and counting rally failures since the reversal day in the same way > he did, I come up with 4 sell signals (rally failures). Take a look at the > IBD chart for the NASDAQ and see what you think. Remember to make your own > decisions. > > Newbies to this list should know that I called a DOW TOP back in November, > following which we had a 10% rally. ------------------------------ From: "tom worley" Date: Thu, 27 Feb 1997 22:32:32 -0500 Subject: Re: [CANSLIM] USRX takeover by 3COM. In any merger/takeover, a number of factors will influence short term pricing. First, if the acquired cos is being taken at a substantial price over its current price, it will gap up. It will not likely trade all the way to the acquisition price however. In an all cash buyout, the focus will be on whether the acquiring co has, or can get, the necessary capital. In an all stock swap like this one, the focus is on where COMS stock will trade in the future. In a separate response to your post, an article was provided suggesting that COMS was buying at a steep discount. If the mkt agreed with this, you would have seen COMS flying up, instead it went south. Some of that was simply short term mkt conditions. However, in most mergers, the acquiring co is seen as having to pay a premium for the purchase (whether done in cash, stock, or a combo) thus short term the acquisition is seen as a drag on earnings and it declines. Also expected is that there will be some one-time charges which will impact overall earnings in one or two qtrs. In this case a substantial charge has already been acknowledged. It has also been said that there will be no layoffs, which suggests to me that the combined growth is so great that any duplication of jobs will be retrained for other positions. This goes to my comment that the combined company can maintain USRX's lead in ultra-fast modems and still take mkt share from CSCO and ASND. ASND's drop today suggests they are already feeling the heat. One question I have is if this is a discounted buyout of USRX, then why? This deal, aside from its size, is most unusual as it was apparently negotiated in about a month, start to finish. That's fast. If the buyout price isn't that good for USRX, why agree so quickly? Anyone got any clues. USRX's failure to trade anywhere near the 71 level it did in aftermkt, and then to close down for the day (granted on a really sh---y day for NASDAQ) suggests that many are not impressed with the deal and/or COMS longer term prospects. Anyway, the basic rules in mergers and acquisitions (M&A) is: acquired co goes up acquiring co goes down unless seen as stealing the deal acquired co trades close to buyout value depending on nature of buyout (cash vs stock) unless other buyout competition seen for the co, in which case it may trade higher than the offering buyout Hope this helps a little tom w - ---------- > From: tbanerje@siac.com > To: canslim@xmission.com > Subject: [CANSLIM] USRX takeover by 3COM. > Date: Thursday, February 27, 1997 10:22 AM > > I am trying to understand what is the impact of this > takeover, why one is up in price and other(COMS) is down? ------------------------------ From: Steve Shepherd Date: Thu, 27 Feb 1997 22:42:31 -0500 Subject: Re: [CANSLIM] USRX takeover by 3COM. I'm certainly not an expert, so correct me if I'm wrong. When the purchasing company's price goes down, it's usually because the company's cash reserves go down. Also, the purchasing company debt load goes up, further decreasing the short term value of the company. Conversely, the company which is bought at a considerable premium over the market per share value obviously goes up because the share holder receives the market value plus the premium. This increases the value of the purchased company. Now, I just had to try one. Please tell me how off base I am.At 10:22 AM 2/27/97 -0500, you wrote: >All of you may know that 3COM planned to purchase USRX. > USRX price shot up to 71 during after hour trading. > Today USRX up about 3 while 3COM down about 2. > > I am trying to understand what is the impact of this > takeover, why one is up in price and other(COMS) is down? > Appreciate any stock guru enlighten on this. > > Thanks, > - Tapas > > ------------------------------ From: Michael A Langston Date: Thu, 27 Feb 1997 22:56:35 -0500 Subject: re: [CANSLIM] The (NASDAQ) Market > I called a DOW TOP back in November, following which we had > a 10% rally. So I am not necessarily the best technical > analyst of the market as a whole. i remember that call craig, but so did arch crawford, so you're in pretty good company -- he reversed himself on his call later, so what-the-heck, i guess we can allow you the same priviledge :) btw, crawford also called (weeks in advance) a top for market close on 18 feb, correct down to the very minute -- even if i discount the self-fulfilling-prophesy angle, i'm impressed! mike, up to his *ss in planetary alignment charts ;) ------------------------------ From: Michael A Langston Date: Thu, 27 Feb 1997 22:56:51 -0500 Subject: re: [CANSLIM] USRX takeover by 3COM. > Anyway, the basic rules in mergers and acquisitions (M&A) is: > acquired co goes up > acquiring co goes down unless seen as stealing the deal > acquired co trades close to buyout value depending on nature of >buyout (cash vs stock) unless other buyout competition seen for the >co, in which case it may trade higher than the offering buyout why tom, you are getting laconic after all :) today's action makes this deal look more like a takeunder than a takeover -- reminds me of why buffet is often quoted as preferring cash to stock in these situations -- smart guy! mike ------------------------------ From: musicant@autobahn.org (Dan Musicant) Date: Fri, 28 Feb 1997 04:45:23 GMT Subject: Re: [CANSLIM] USRX takeover by 3COM. On Thu, 27 Feb 1997 22:32:32 -0500, you wrote: :Anyone got any clues. : :tom w I believe it is possible that USRobotics is not faring very well in the x2 modem technology wars. They are late in rolling it out, and although perhaps first, they may not triumph. I don't know whether it is finally available or not. Their website would have you believe so, but it is not clear how the *real* rollout will go. Their high end Courier modems will be upgradeable within the week, or so they maintain. I can't help but be a little doubtful. The delay in the upgrade is viewed now by some as fallout from the merger, rather than a technical issue. There is a lot of uncertainty in the modem marketplace now due to the competing new standards. An interesting issue is how 3Com will handle this problem. 3Com has been supporting a different 56k standard than USRobotics. They can't very well trash either of them now. Dan :---------- :> From: tbanerje@siac.com :> To: canslim@xmission.com :> Subject: [CANSLIM] USRX takeover by 3COM. :> Date: Thursday, February 27, 1997 10:22 AM :>=20 :> I am trying to understand what is the impact of this :> takeover, why one is up in price and other(COMS) is down? ------------------------------ From: pwahl@postoffice.worldnet.att.net Date: Thu, 27 Feb 1997 19:44:18 -0800 Subject: [CANSLIM] Cups and handles I sent this a few days ago, don't think it made it to the list... - ----------------------------------------------------------------- > From: "James Adams" > > What is an ideal time frame for the cup/handle pattern? > From March, 1995 Tech. Analysis of Stocks - " The cup of the pattern typically forms during intermediate-term market corrections and is usually 3-6 months in duration, but can be as long as 12 months during bear markets, or as short as seven weeks during bull markets." ------------------------------ From: pwahl@postoffice.worldnet.att.net Date: Thu, 27 Feb 1997 19:44:18 -0800 Subject: Re: [CANSLIM] The (NASDAQ) Market > To: canslim@xmission.com > From: Craig Griffin > This is a resend - sent it 3 hours ago - never got it back. So here it is > again. Seems like it takes 2 or 3 tries more and more for me to get through. > Anyway ... > I've sent several brilliant posts in the last few days that haven't reached here. Now all I have left are my average comments. > FWIW - the NASDAQ closed below its 50 dma today convincingly. This is the > first time that has happened since 6/18/96. > > Additionally, the divergence continues, with the NASDAQ significantly > underperfoming the DOW and to a lesser extent the S&P 500. > I've also noticed that the NASDAQ is starting to look sort of sickly. It formed a series of successively lower highs in the last 4-5 weeks, which is probably not a good sign. Today the leaders of the last few months, at least, took a real drubbing, including ASND, INTC, MCAF, MSFT, DELL, plus a few others I watch, like Pair, EFII, AMAT. Personally, I am laying off of everything for the time being. ------------------------------ From: "tom worley" Date: Fri, 28 Feb 1997 06:44:58 -0500 Subject: Re: [CANSLIM] USRX takeover by 3COM. Yeah, but the "laconic" was a little late in arriving. After I read the prior 30 lines or so, wasn't sure if I had answered the original question. So, now I'm a Buffet follower? I ALWAYS prefer cash to stock. tom - ---------- > From: Michael A Langston > To: canslim@xmission.com > Subject: re: [CANSLIM] USRX takeover by 3COM. > Date: Thursday, February 27, 1997 10:56 PM > > > why tom, you are getting laconic after all :) > > today's action makes this deal look more like a takeunder > than a takeover -- reminds me of why buffet is often quoted > as preferring cash to stock in these situations -- smart guy! > > mike ------------------------------ From: "tom worley" Date: Fri, 28 Feb 1997 06:51:06 -0500 Subject: Re: [CANSLIM] USRX takeover by 3COM. Dan, Shipping less than a week late when they were an estimated six months ahead of Rockwell shouldn't have any impact at all. Estimates are that they already have six million upgradable modems in service, so may take a while for everyone to download the software. Of course, their big marketing advantage is that theirs is software upgradable while Rockwell's is not, so even if a different std is finally adopted, they can convert easier than most. A merger related charge is typical and has already been indicated. Possibly part of it is to write off development of different competing programs so as to have just one. BTW, I believe the merger had nothing to do with the delay, least can't imagine why. tom w - ---------- From: Dan Musicant To: canslim@xmission.com Subject: Re: [CANSLIM] USRX takeover by 3COM. Date: Thursday, February 27, 1997 11:45 PM On Thu, 27 Feb 1997 22:32:32 -0500, you wrote: :Anyone got any clues. : :tom w I believe it is possible that USRobotics is not faring very well in the x2 modem technology wars. They are late in rolling it out, maintain. I can't help but be a little doubtful. The delay in the upgrade is viewed now by some as fallout from the merger, rather than issue is how 3Com will handle this problem. 3Com has been supporting a different 56k standard than USRobotics. They can't very well trash either of them now. ------------------------------ From: "tom worley" Date: Fri, 28 Feb 1997 07:22:57 -0500 Subject: [CANSLIM] Fw: Site that graphs PE's Hey guys and gals, picked this up on the net, sounds interesting. tom w - ---------- > From: Edward E. Murphy > Newsgroups: misc.invest.stocks > Subject: Re: Site that graphs PE's > Date: Thursday, February 27, 1997 8:55 AM > > dal@mindspring.com wrote: > > > > Is there a site that will graph PE ratios vs. time? > > Marketplayer offers 10 years of monthly constant time horizon historical > earnings estimates, available in a Java chart application (also 2.5 > years of weekly estimates). You can see P/E and relative P/E as well. > Aslo earnings surprise for 10 years (which is fun). > > We could show reported earnings in our graph app, but having looked at > many such charts, I can tell you reported earnings are usually far > behind the price movement. Also, P/E multiples based on reported > earnings are not representative of the market valuation and often > inaccurate. P/Es based on estimated earnings are better in these > regards. > > Ted Murphy > MarketPlayer > > *** for free, sponsored access to MarketPlayer, including historical > EPS, P/E and relative P/E graphs and entry into the upcoming > invest-o-rama! HedgeHog Competition, register at > http://www.marketplayer.com/sponsor/investorama > ------------------------------ End of canslim Digest V1 #101 ***************************** To subscribe to canslim Digest, send the command: subscribe canslim-digest in the body of a message to "majordomo@xmission.com". 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