From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #1329 Reply-To: canslim Sender: owner-canslim-digest@lists.xmission.com Errors-To: owner-canslim-digest@lists.xmission.com Precedence: bulk Content-Transfer-Encoding: quoted-printable X-No-Archive: yes canslim-digest Monday, April 30 2001 Volume 02 : Number 1329 In this issue: Re: [CANSLIM] Results of Market Outlook Survey [CANSLIM] WLSN broke out on a large volume increase today. Re: [CANSLIM] potential growth Re: [CANSLIM] MRS [CANSLIM] PIR Nosedive Re: [CANSLIM] MRS Re: [CANSLIM] PIR Nosedive Re: [CANSLIM] PIR Nosedive Re: [CANSLIM] PIR Nosedive [CANSLIM] Virii Re: [CANSLIM] WLSN broke out on a large volume increase today. Re: [CANSLIM] PIR Nosedive VSEA (was Re: [CANSLIM] PIR Nosedive) ---------------------------------------------------------------------- Date: Mon, 30 Apr 2001 07:02:29 -0700 From: Dan Subject: Re: [CANSLIM] Results of Market Outlook Survey Jeff told me there were 427 about 3 weeks ago. And I think there has been one or two since then. Norman wrote: > I would not have guessed there were 430 members. Is the group growing? > > Norman Boyd > theboyd@tisd.net > > ----- Original Message ----- > From: "Dan" > To: > Sent: Sunday, April 29, 2001 10:40 PM > Subject: [CANSLIM] Results of Market Outlook Survey > > > Twelve out of approximately 430 members responded. > > > > Down Same Up > > S&P500 2 2 8 > > Nyse 2 2 8 > > Nazdaq 2 0 10 > > Russel 1 1 10 > > > > Four are 0 to 25% invested > > one is 25 to 50% invested > > Two are 50 to 75% invested > > Five are Fully invested > > > > The extremes: > > Those thinking all indices would be higher > > > > Three are 0 to 25% invested > > One is 25 to 50% invested > > One is 50 to 75%+ invested > > Three are Fully invested. > > > > Those thinking all indices would be lower > > > > One is 0 to 25% invested > > One is Fully invested > > > > > > - > > -To subscribe/unsubscribe, email "majordomo@xmission.com" > > -In the email body, write "subscribe canslim" or > > -"unsubscribe canslim". Do not use quotes in your email. > > > > > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Mon, 30 Apr 2001 14:00:37 -0700 From: "Ian" Subject: [CANSLIM] WLSN broke out on a large volume increase today. I see a nice cup from late August to early March, followed by a shallow handle. The pivot point was $20 1/8, and there was a nice window early this morning to get in there. As an added bonus, it also moved past its 52-week high of $21 1/2 today. Volume was impressive. They have announced sales results for Feb and Mar (up 25% and 34%), so perhaps they will have a strong Q and not lose money. WLSN is in an ultra-lumpy business, so sequential numbers mean nothing, but the year-over-year #'s look good - and the P/E is less than 10. We'll see. Cheers, Ian - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Mon, 30 Apr 2001 19:53:07 -0400 From: "Ann Hollingworth" Subject: Re: [CANSLIM] potential growth Thanks for this, Kent. Can you also use this backwards? I mean, can you take the excel document and translate it to CSV to send online. Is there any other way I can use this? Can I transcribe info from online sources this way? Thanks. Ann - ----- Original Message ----- From: "Kent Norman" To: "CANSLIM" Sent: Monday, April 30, 2001 5:44 AM Subject: [CANSLIM] potential growth > Here is a list of mostly CS stocks. It shows how close > they are to 1.5x 50dma and 2x 200dma. Many people > start watching for a chance to take profits when the > price approaches these points. > > This is comma separated value (CSV). To get it into > your spreadsheet: > 1. Highlight the data > 2. copy > 3. Open notepad (or any plain text editor) > 4. paste > 5. save > 6. open spreadsheet > 7. file, open, pick the filename you saved it as > 8. select delimited, CSV > > Regards > Kent Norman > > symbol,current price,50MA,200MA, 1.5x50MA , 2x200MA ,% > above 50dma,% above 200dma, 1.5x POTENTIAL , 2x > POTENTIAL > aci,31.48,28.04,15.19, $ 42.06 , $ 30.38 > ,11%,52%,34%,-3% > ally,22.38,16.32,8.54, $ 24.48 , $ 17.08 > ,27%,62%,9%,-24% > coo,45.5,42.95,37.02, $ 64.43 , $ 74.04 > ,6%,19%,42%,63% > efds,20.5,18.11,11.59, $ 27.17 , $ 23.18 > ,12%,43%,33%,13% > escm,26.94,22.55,17.50, $ 33.83 , $ 35.00 > ,16%,35%,26%,30% > flya,11.11,8.97,6.91, $ 13.46 , $ 13.82 > ,19%,38%,21%,24% > gpi,18.2,13.19,10.76, $ 19.79 , $ 21.52 > ,28%,41%,9%,18% > hoc,36.02,25.24,16.75, $ 37.86 , $ 33.50 > ,30%,53%,5%,-7% > hov,17.9,13.25,9.19, $ 19.88 , $ 18.38 > ,26%,49%,11%,3% > IGT,57,51.90,42.90, $ 77.85 , $ 85.80 > ,9%,25%,37%,51% > igt,56.91,52.73,41.66, $ 79.10 , $ 83.32 > ,7%,27%,39%,46% > kmx,10.41,6.76,4.92, $ 10.14 , $ 9.84 > ,35%,53%,-3%,-5% > modt,11.46,9.19,8.96, $ 13.79 , $ 17.92 > ,20%,22%,20%,56% > movi,7.43,6.24,4.37, $ 9.36 , $ 8.74 > ,16%,41%,26%,18% > nvr,196,160.00,108.00, $ 240.00 , $ 216.00 > ,18%,45%,22%,10% > olog,26.8,24.34,19.40, $ 36.51 , $ 38.80 > ,9%,28%,36%,45% > optn,13,8.76,7.00, $ 13.14 , $ 14.00 > ,33%,46%,1%,8% > pbt,6.5,6.52,5.87, $ 9.78 , $ 11.74 > ,0%,10%,50%,81% > phm,49.5,38.00,34.06, $ 57.00 , $ 68.12 > ,23%,31%,15%,38% > rbnc,13.2,12.34,9.93, $ 18.51 , $ 19.86 > ,7%,25%,40%,50% > rcgi,28.78,26.49,23.51, $ 39.74 , $ 47.02 > ,8%,18%,38%,63% > rgfc,19.17,16.62,12.26, $ 24.93 , $ 24.52 > ,13%,36%,30%,28% > ryan,12.19,10.70,9.21, $ 16.05 , $ 18.42 > ,12%,24%,32%,51% > sfc,11.74,8.07,, $ 12.11 , ,31%,100%,3%,n/a > stnv,13.64,10.03,8.01, $ 15.05 , $ 16.02 > ,26%,41%,10%,17% > strc,26.2,18.92,14.35, $ 28.38 , $ 28.70 > ,28%,45%,8%,10% > uslb,14,8.60,5.17, $ 12.90 , $ 10.34 > ,39%,63%,-8%,-26% > wgov,67.15,54.33,44.33, $ 81.50 , $ 88.66 > ,19%,34%,21%,32% > whes,29.5,22.97,, $ 34.46 , ,22%,100%,17%,n/a > > > __________________________________________________ > Do You Yahoo!? > Yahoo! Auctions - buy the things you want at great prices > http://auctions.yahoo.com/ > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Mon, 30 Apr 2001 20:47:52 EDT From: Spencer48@aol.com Subject: Re: [CANSLIM] MRS Tom: Does the exercising of the warrants (to purchase the stock) mean that volume is affected commensurately, ie. for each warrant exercised (which, in this example, allows for 100 shares to be purchased) the volume of the stock increases by 100? And, if so, who are the sellers? Does this also apply when an employee exercises a stock option? And in this case, where the employee exercises the stock-option, who are the sellers? jans In a message dated 4/30/2001 2:58:57 AM Eastern Daylight Time, stkguru@netside.net writes: << The unusual volume in the past two days may be the exercising of the warrants. Or, maybe there are rumors of the deal being sweetened. It is unusual to see it trading so close to the cash buyout price unless there is a potential for a competing, better offer. Either way, it is pretty much a game for the arbitrage players only. Tom Worley >> - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Mon, 30 Apr 2001 20:50:37 -0400 From: "Hugh Fader" Subject: [CANSLIM] PIR Nosedive This is a multi-part message in MIME format. - ------=_NextPart_000_0003_01C0D1B7.36A865C0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: 7bit PIR revised estimates today and took a dump. Fortunately I don't own it, but am looking for a lesson. It broke out on 4/10 on double average volume. Just buying in the first place would violate some rules: price < $16, +12% EPS last quarter. Assuming you bought on the breakout, what do you see in the action following this that might have led you to sell? Add to my list below: 1. First day after breakout price fell below pivot on heavy volume. 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Do not use quotes in your email. ------------------------------ Date: Mon, 30 Apr 2001 21:55:42 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] MRS When a warrant is exercised, or an employee exercises a stock option, there is, per se, no sale transaction. A brand new share is issued by the company in both cases. Assuming both were already in the money (underlying stock priced above the exercise) then these new shares were already being counted in any "diluted" reports, such as earnings per share. Typically, however, when either event occurs, the issue of the new shares is immediately followed by the sale of the new shares. In the case of an employee exercising a stock option, he needs the money from the sale to pay the taxes due, as well as cover the capital for exercising. In the case of a warrant holder, his only reason for exercising (which requires that he put up additional capital) is it is being forced, and the selling price of the stock is better than that of the warrant plus intrinsic value. When a company "calls" an in-the-money warrant, typically both the warrant and the stock drop in price. This is because some warrant holders don't have the addl capital to exercise, so sell. And some hold both the stock and the warrants so sell the stock to raise case to exercise the warrants. So selling pressure on both. In the case of MRS, the cash offer of $27.00 keeps the price of the stock elevated, while the warrants undoubtedly dropped a little. So you exercise and immediately sell the stock, giving you the free cash to pay for the exercise. And you must either exercise or sell the warrants, as typically they are otherwise worthless in a cash buyout (and often in a stock buyout as well). As an hypothetical example, several years ago you bot the warrants for $1.50 and thereby gained the right to exercise them for stock at $15.00 per warrant. If you exercise, you have a total investment of $16.50. Right now the warrants are trading at $10.50, net gain $9.00. But the stock is trading at $26.89 (intrinsic value of the warrant is $11.89, even tho priced by the market at $10.50 because of the selling pressure, and the need to infuse addl capital to exercise). So you spend that $15.00 in a virtually riskless transaction, and immediately sell the stock at $26.85, netting a gain of $10.85, much better than the gain of $9.00 from just straight selling the warrants. Who are the buyers (of the warrants or the stock) in this case? Mostly arbitrage players, who are trying to pick up the few cents remaining between market pricing and the buyout price, and taking the risk that the deal doesn't fall apart. That this stock is trading within a few pennies of the buyout price suggests a) there is speculation that the deal will be sweetened; b) there is speculation of a new competing (and higher) bid to be made; c) that the deal is about to be closed (can check this by seeing when the shareholder meeting is scheduled, usually closes the same day) meaning capital won't be tied up for long; or d) there is some kind of trailing "kicker" in the deal which will make a supplemental payment in the future based on earnings, revenues, asset value, etc. I have seen these kickers end up worth 3-5% or more of the buyout price, so a nice potential bonus to an arbitrage player willing to hang on to the end. Typically, I expect to see anywhere from a qtr pt to a pt and a half available for the arbitrage player, depending on the deal (cash is smaller, stock is bigger, if it's cash and the buyer already has the cash available it's even smaller still). In the case of my bank's pending buyout, which is a combo cash and stock with the stock worth slightly more than half of the deal, the stock is trading in step with the acquirer, and about a 2% (1 Euro per share) discount to the then value per share of the deal. DISCLOSURE: I have done no due dili on this stock, all examples and speculation are exactly that, and I have never ever owned it to the best of my recollection. Bottom line: it's not CANSLIM, but a good example of how to recognize a buyout in progress when the charting service does not so indicate (fortunately DGO usually does). Tom Worley stkguru@netside.net - ----- Original Message ----- From: To: Sent: Monday, April 30, 2001 8:47 PM Subject: Re: [CANSLIM] MRS Tom: Does the exercising of the warrants (to purchase the stock) mean that volume is affected commensurately, ie. for each warrant exercised (which, in this example, allows for 100 shares to be purchased) the volume of the stock increases by 100? And, if so, who are the sellers? Does this also apply when an employee exercises a stock option? And in this case, where the employee exercises the stock-option, who are the sellers? jans In a message dated 4/30/2001 2:58:57 AM Eastern Daylight Time, stkguru@netside.net writes: << The unusual volume in the past two days may be the exercising of the warrants. Or, maybe there are rumors of the deal being sweetened. It is unusual to see it trading so close to the cash buyout price unless there is a potential for a competing, better offer. Either way, it is pretty much a game for the arbitrage players only. Tom Worley >> - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Mon, 30 Apr 2001 20:08:21 -0600 From: DougC Subject: Re: [CANSLIM] PIR Nosedive Even though PIR does not meet what most of us use as minimun criteria for canslim, there was nothing a person could have seen in the fundamentals on 4/10 that would have hinted at the break that occured today. PIR is a strong stock. Or was. As of today it has an EPS of 91, long term growth rate of 19, GRS A, SMR A, earnings stability 8 (less than 25 is very good), cash flow 1.20, ROE 20%. Even though its last qtr was only12% over same quarter previous year that's still not a bad number. Sequentially it's earnings growth were very good. PIR is making money and has little debt. It's PE is already down to 11. Book value is 2.41. And as far as price volume action is concerned, there was only one distribution day after 04/10. that was on 04/24 when PIR closed down on greater volume than previous day. And that volume, 553K, was less than ADV of 716K. As far as stops are concerned...I would have gotten killed because I only use mental stops. but I can assure you I would be out today, or early tomorrow, and I would'nt like back. Dems the breaks. As a comparison look at IGT. Far superior fundamentals but really scary price volume action. On 04/18 broke to new high on 2x vol. (1.5M vs. adv of 755K.) Next day gave back all of previous gains on 2x vol. (1.7M - dist day) and closed on it's low. Seven days later, today, there's another dist day on vol greater than ADV. Not the way a handle should look. should be decreasing vol when handle forms. Yes I'm in IGT and yes I'm scared. Probably will get out tomorrow, without really incuring a loss yet, and just wait and see if the price/vol action improves...and just admit that I got in too early in the first place. In addition to your question about what to look for in price/volume action to forsee a break in stock price I also think PIR is a good example to counter WON's assertion that you only need to focus on 4 or 5 stocks. Below I list a chart from a book I read that had a section on reducing risk in stocks/options by increasing number of issues held. # of issues % Total Risk %Total Risk Reduced %Co. Related Risk Reduced 1 100 0 0 2 80 20 29 3 75 25 36 4 70 30 43 5 65 35 50 10 50 50 71 20 45 55 79 40 40 60 86 100 35 65 93 2000 30 70 100 Based on this chart I use 10 as number of issues I want to hold. >PIR revised estimates today and took a dump. Fortunately I don't own it, but >am looking for a lesson. It broke out on 4/10 on double average volume. Just >buying in the first place would violate some rules: price < $16, +12% EPS >last quarter. Assuming you bought on the breakout, what do you see in the >action following this that might have led you to sell? Add to my list below: > >1. First day after breakout price fell below pivot on heavy volume. Closed >at its low. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Mon, 30 Apr 2001 22:48:18 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] PIR Nosedive Hi Hugh, Maybe it's just definitions differences, but I don't see a b/o on 4/10, by then it was already extended. The only b/o I see recently is on 4/5, when at least it had a short two week base to operate off of, and volume was better than 1.5 ADV. By 4/10, not only was there no base, but it was nearly 10% over that short base. The only thing that marks 4/10 as a "b/o" is that it hit a new high (thereby crossing the pivot, in at least one sense). But it takes more than simply making a new high to be a b/o, you need some kind of basing formation, and by 4/10 that was no longer evident. Had I been trying to buy this one, and failed to catch it around 13, I would have already saw it leave the train station by 4/10 and been looking for the next ride. This one is tricky, in that with home sales (both new and used) so strong, and rates falling, it stands to reason that retail companies selling home furnishings, and home improvement products, stand to see robust sales in the future. As to additional "rules" that would have warned you to stay away, start with the earnings forecast for this year of only 10% growth. That right there stops it being CANSLIM. Me personally, I don't like companies with weird fiscal years (this one ended Feb). If you can't end it on 12/31, at least end it on a normal calendar quarter so you're in the cycle with everyone else. Heck, even Japan manages to have all their companies close their year March 31 together. Bottom line for me is that in this highly volatile environment, where virtually every company big and small has warned they won't meet forecasts, the key is not so much what they did last (1st) qtr as investors only expect bad news there. The key is what they say about the future. I have seen numerous companies report above expectations, esp where the expectations were recently lowered, but their doom and gloom forecast for the rest of the year, or even next (2nd) qtr, was negative, and the stock was trashed. Surprisingly, I have also seen companies beat the 1st qtr forecasts/estimates, and speak well of the rest of the year, and still get trounced. Mostly happens on a bad day, but I've seen it on good days as well. Guess you just can't please all the people all the time. I look at the charts of every company I can find that says it will meet or beat expectations, regardless of whether it went up or down on the news. So far, I have not added many companies to my watch list with this method. Almost every one I faulted for some reason, often low RS. The only place I still am able to consistently find viable candidates is from the new highs stocks. And then only if I really like the chart, as well as all the fundies. Tom Worley stkguru@netside.net - ----- Original Message ----- From: Hugh Fader To: CANSLIM List (E-mail) Sent: Monday, April 30, 2001 8:50 PM Subject: [CANSLIM] PIR Nosedive PIR revised estimates today and took a dump. Fortunately I don't own it, but am looking for a lesson. It broke out on 4/10 on double average volume. Just buying in the first place would violate some rules: price < $16, +12% EPS last quarter. Assuming you bought on the breakout, what do you see in the action following this that might have led you to sell? Add to my list below: 1. First day after breakout price fell below pivot on heavy volume. Closed at its low. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Mon, 30 Apr 2001 22:59:07 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] PIR Nosedive Too low of a PE is also a good warning flag, after all, the market (and all those other individual and institutional investors out there) may just know what they are doing, at the least they reflect "market sentiment". And a low trailing PE (even before today it was only 15) strongly suggests low expectations. The earnings forecast for only 10% growth only heightens that. That was probably the best single clue. Tom Worley stkguru@netside.net - ----- Original Message ----- From: DougC To: Sent: Monday, April 30, 2001 10:08 PM Subject: Re: [CANSLIM] PIR Nosedive Even though PIR does not meet what most of us use as minimun criteria for canslim, there was nothing a person could have seen in the fundamentals on 4/10 that would have hinted at the break that occured today. PIR is a strong stock. Or was. As of today it has an EPS of 91, long term growth rate of 19, GRS A, SMR A, earnings stability 8 (less than 25 is very good), cash flow 1.20, ROE 20%. Even though its last qtr was only12% over same quarter previous year that's still not a bad number. Sequentially it's earnings growth were very good. PIR is making money and has little debt. It's PE is already down to 11. Book value is 2.41. And as far as price volume action is concerned, there was only one distribution day after 04/10. that was on 04/24 when PIR closed down on greater volume than previous day. And that volume, 553K, was less than ADV of 716K. As far as stops are concerned...I would have gotten killed because I only use mental stops. but I can assure you I would be out today, or early tomorrow, and I would'nt like back. Dems the breaks. As a comparison look at IGT. Far superior fundamentals but really scary price volume action. On 04/18 broke to new high on 2x vol. (1.5M vs. adv of 755K.) Next day gave back all of previous gains on 2x vol. (1.7M - dist day) and closed on it's low. Seven days later, today, there's another dist day on vol greater than ADV. Not the way a handle should look. should be decreasing vol when handle forms. Yes I'm in IGT and yes I'm scared. Probably will get out tomorrow, without really incuring a loss yet, and just wait and see if the price/vol action improves...and just admit that I got in too early in the first place. In addition to your question about what to look for in price/volume action to forsee a break in stock price I also think PIR is a good example to counter WON's assertion that you only need to focus on 4 or 5 stocks. Below I list a chart from a book I read that had a section on reducing risk in stocks/options by increasing number of issues held. # of issues % Total Risk %Total Risk Reduced %Co. Related Risk Reduced 1 100 0 0 2 80 20 29 3 75 25 36 4 70 30 43 5 65 35 50 10 50 50 71 20 45 55 79 40 40 60 86 100 35 65 93 2000 30 70 100 Based on this chart I use 10 as number of issues I want to hold. >PIR revised estimates today and took a dump. Fortunately I don't own it, but >am looking for a lesson. It broke out on 4/10 on double average volume. Just >buying in the first place would violate some rules: price < $16, +12% EPS >last quarter. Assuming you bought on the breakout, what do you see in the >action following this that might have led you to sell? Add to my list below: > >1. First day after breakout price fell below pivot on heavy volume. Closed >at its low. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Mon, 30 Apr 2001 20:11:38 -0700 From: Dan Subject: [CANSLIM] Virii There are a bunch of virii and such circulating again, in the last few days, on some of the lists that I inhabit. It seems that the cycle is getting shorter. Be aware that if you do not have protection you will likely be infected and infect others. Not a way to spread good feelings! Install a good antivirus program. Dan - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Mon, 30 Apr 2001 23:13:22 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] WLSN broke out on a large volume increase today. Unfortunately, Ian, only speculation on how the 1st qtr may turn out, or more importantly how investors, esp institutionals, will react to it. Looks like this company loses money for three qtrs, then makes it all in the 4th qtr. I can recall my wife and I exchanging leather jackets during the post-Christmas sales, so understand that. So maybe the 1st qtr they will lose less than the 5 cents they lost last year. But the low trailing PE again, like PIR, suggests that expectations are not very high. And with two of the three months of Q2 sales already known, still expectation is not driving the price higher (if you don't count today). With their "big" quarter now out of the way, where's the excitement to drive expectations for another nine months. That's one of the problems with cyclical stocks heavily focused on one or two qtrs. Chart wise, I just see the current base from which it broke today. The longer term pattern, esp in light of all the other background noise ("M", economics, etc) only seem to confuse the picture. If this is the handle to a cup, then at seven weeks, it is suspiciously long. Tom Worley stkguru@netside.net - ----- Original Message ----- From: Ian To: Sent: Monday, April 30, 2001 5:00 PM Subject: [CANSLIM] WLSN broke out on a large volume increase today. I see a nice cup from late August to early March, followed by a shallow handle. The pivot point was $20 1/8, and there was a nice window early this morning to get in there. As an added bonus, it also moved past its 52-week high of $21 1/2 today. Volume was impressive. They have announced sales results for Feb and Mar (up 25% and 34%), so perhaps they will have a strong Q and not lose money. WLSN is in an ultra-lumpy business, so sequential numbers mean nothing, but the year-over-year #'s look good - and the P/E is less than 10. We'll see. Cheers, Ian - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Mon, 30 Apr 2001 21:19:16 -0600 From: DougC Subject: Re: [CANSLIM] PIR Nosedive I know WON does say that a low PE is low for a reason. But he also ignores high PE's. Is that inconsistent? VSEA had a PE of 8 in early December and stock price in the 20 to 25 range. Now, 5 months later, it's stock price is 45 and PE still low at 13. Makes me wonder if PE's should be ignored on the low end also. At 10:59 PM 4/30/01 -0400, you wrote: >Too low of a PE is also a good warning flag, after all, the >market (and all those other individual and institutional >investors out there) may just know what they are doing, at the >least they reflect "market sentiment". And a low trailing PE >(even before today it was only 15) strongly suggests low >expectations. The earnings forecast for only 10% growth only >heightens that. That was probably the best single clue. > >Tom Worley >stkguru@netside.net > > >----- Original Message ----- >From: DougC >To: >Sent: Monday, April 30, 2001 10:08 PM >Subject: Re: [CANSLIM] PIR Nosedive > > > Even though >PIR does not meet what most of us use as minimun criteria for >canslim, there >was nothing a person could have seen in the fundamentals on 4/10 >that would >have hinted at the break that occured today. PIR is a strong >stock. Or was. As >of today it has an EPS of 91, long term growth rate of 19, GRS A, >SMR A, >earnings stability 8 (less than 25 is very good), cash flow 1.20, >ROE 20%. >Even though its last qtr was only12% over same quarter previous >year that's >still not a bad number. Sequentially it's earnings growth were >very good. PIR >is making money and has little debt. It's PE is already down to >11. Book value >is 2.41. And as far as price volume action is concerned, there >was only one >distribution day after 04/10. that was on 04/24 when PIR closed >down on greater >volume than previous day. And that volume, 553K, was less than >ADV of 716K. >As far as stops are concerned...I would have gotten killed >because I only use >mental stops. but I can assure you I would be out today, or early >tomorrow, >and I >would'nt like back. Dems the breaks. > >As a comparison look at IGT. Far superior fundamentals but really >scary price >volume action. On 04/18 broke to new high on 2x vol. (1.5M vs. >adv of 755K.) >Next day gave back all of previous gains on 2x vol. (1.7M - dist >day) >and closed on it's low. Seven days later, today, there's another >dist day >on vol >greater than ADV. Not the way a handle should look. should be >decreasing >vol when handle forms. Yes I'm in IGT and yes I'm scared. >Probably will get out >tomorrow, without really incuring a loss yet, and just wait and >see if the >price/vol >action improves...and just admit that I got in too early in the >first place. > >In addition to your question about what to look for in >price/volume action to >forsee a break in stock price I also think PIR is a good example >to counter >WON's assertion that you only need to focus on 4 or 5 stocks. >Below I list >a chart >from a book I read that had a section on reducing risk in >stocks/options by >increasing number of issues held. > ># of issues % Total Risk %Total Risk Reduced %Co. >Related Risk >Reduced > 1 100 0 >0 > 2 80 20 >29 > 3 75 25 >36 > 4 70 30 >43 > 5 65 35 >50 > 10 50 50 >71 > 20 45 55 >79 > 40 40 60 >86 > 100 35 65 >93 > 2000 30 70 >100 > >Based on this chart I use 10 as number of issues I want to hold. > > > >PIR revised estimates today and took a dump. Fortunately I don't >own it, but > >am looking for a lesson. It broke out on 4/10 on double average >volume. Just > >buying in the first place would violate some rules: price < $16, >+12% EPS > >last quarter. Assuming you bought on the breakout, what do you >see in the > >action following this that might have led you to sell? Add to my >list below: > > > >1. First day after breakout price fell below pivot on heavy >volume. Closed > >at its low. > > >- >-To subscribe/unsubscribe, email "majordomo@xmission.com" >-In the email body, write "subscribe canslim" or >-"unsubscribe canslim". Do not use quotes in your email. > > > >- >-To subscribe/unsubscribe, email "majordomo@xmission.com" >-In the email body, write "subscribe canslim" or >-"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Tue, 1 May 2001 00:04:33 -0400 From: "Tom Worley" Subject: VSEA (was Re: [CANSLIM] PIR Nosedive) He ignores PEs on the trailing end, because that's history. He pays close attention to forecasted PEs, because that's the future, and reflects expectations. VSEA has a forecasted DECLINE in earnings of 19% this year (ends Sep) and a further decline of 28% for next fiscal year. How is that expected to enhance expectations of shareholders, in an era of weak economics, but optimism that we are on the road to recovery? There are huge numbers of stocks out there where the forecast is still positive, even if not at the levels of just a year ago. Declining forecasted earnings = declining expectations = declining PE ratios (both trailing and forecasted). Even if somehow they manage to beat forecasts and estimates, there is still a good chance that declining expectations will cause the stock to trade at a lower multiple, and thus a lower price unless they beat forecasts and estimates by a huge margin. This stock has shown 7 consecutive sequential quarters of earnings increases, and six of the past seven qtrs also had sales increases sequentially. For the latest qtr, they show 13% decline in earnings year to year, and over a 50% decline in earnings sequentially. And that's on an 11% increase in revenues. I call that busting the pattern, it certainly doesn't get me hyped up to own this stock. There's a reason the trailing PE is only 13. Tom Worley stkguru@netside.net - ----- Original Message ----- From: DougC To: Sent: Monday, April 30, 2001 11:19 PM Subject: Re: [CANSLIM] PIR Nosedive I know WON does say that a low PE is low for a reason. But he also ignores high PE's. Is that inconsistent? VSEA had a PE of 8 in early December and stock price in the 20 to 25 range. Now, 5 months later, it's stock price is 45 and PE still low at 13. Makes me wonder if PE's should be ignored on the low end also. At 10:59 PM 4/30/01 -0400, you wrote: >Too low of a PE is also a good warning flag, after all, the >market (and all those other individual and institutional >investors out there) may just know what they are doing, at the >least they reflect "market sentiment". And a low trailing PE >(even before today it was only 15) strongly suggests low >expectations. The earnings forecast for only 10% growth only >heightens that. That was probably the best single clue. > >Tom Worley >stkguru@netside.net > > >----- Original Message ----- >From: DougC >To: >Sent: Monday, April 30, 2001 10:08 PM >Subject: Re: [CANSLIM] PIR Nosedive > > > Even though >PIR does not meet what most of us use as minimun criteria for >canslim, there >was nothing a person could have seen in the fundamentals on 4/10 >that would >have hinted at the break that occured today. PIR is a strong >stock. Or was. As >of today it has an EPS of 91, long term growth rate of 19, GRS A, >SMR A, >earnings stability 8 (less than 25 is very good), cash flow 1.20, >ROE 20%. >Even though its last qtr was only12% over same quarter previous >year that's >still not a bad number. Sequentially it's earnings growth were >very good. PIR >is making money and has little debt. It's PE is already down to >11. Book value >is 2.41. And as far as price volume action is concerned, there >was only one >distribution day after 04/10. that was on 04/24 when PIR closed >down on greater >volume than previous day. And that volume, 553K, was less than >ADV of 716K. >As far as stops are concerned...I would have gotten killed >because I only use >mental stops. but I can assure you I would be out today, or early >tomorrow, >and I >would'nt like back. Dems the breaks. > >As a comparison look at IGT. Far superior fundamentals but really >scary price >volume action. On 04/18 broke to new high on 2x vol. (1.5M vs. >adv of 755K.) >Next day gave back all of previous gains on 2x vol. (1.7M - dist >day) >and closed on it's low. Seven days later, today, there's another >dist day >on vol >greater than ADV. Not the way a handle should look. should be >decreasing >vol when handle forms. Yes I'm in IGT and yes I'm scared. >Probably will get out >tomorrow, without really incuring a loss yet, and just wait and >see if the >price/vol >action improves...and just admit that I got in too early in the >first place. > >In addition to your question about what to look for in >price/volume action to >forsee a break in stock price I also think PIR is a good example >to counter >WON's assertion that you only need to focus on 4 or 5 stocks. >Below I list >a chart >from a book I read that had a section on reducing risk in >stocks/options by >increasing number of issues held. > ># of issues % Total Risk %Total Risk Reduced %Co. >Related Risk >Reduced > 1 100 0 >0 > 2 80 20 >29 > 3 75 25 >36 > 4 70 30 >43 > 5 65 35 >50 > 10 50 50 >71 > 20 45 55 >79 > 40 40 60 >86 > 100 35 65 >93 > 2000 30 70 >100 > >Based on this chart I use 10 as number of issues I want to hold. > > > >PIR revised estimates today and took a dump. Fortunately I don't >own it, but > >am looking for a lesson. It broke out on 4/10 on double average >volume. Just > >buying in the first place would violate some rules: price < $16, >+12% EPS > >last quarter. Assuming you bought on the breakout, what do you >see in the > >action following this that might have led you to sell? Add to my >list below: > > > >1. First day after breakout price fell below pivot on heavy >volume. Closed > >at its low. > > >- >-To subscribe/unsubscribe, email "majordomo@xmission.com" >-In the email body, write "subscribe canslim" or >-"unsubscribe canslim". Do not use quotes in your email. > > > >- >-To subscribe/unsubscribe, email "majordomo@xmission.com" >-In the email body, write "subscribe canslim" or >-"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ End of canslim-digest V2 #1329 ****************************** To unsubscribe to canslim-digest, send an email to "majordomo@xmission.com" with "unsubscribe canslim-digest" in the body of the message. For information on digests or retrieving files and old messages send "help" to the same address. Do not use quotes in your message.