From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #2215 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 Wednesday, March 20 2002 Volume 02 : Number 2215 In this issue: Re: [CANSLIM] Forbes Magazine? Re: [CANSLIM] Forbes Magazine? RE: [CANSLIM] SYK Re: [CANSLIM] SYK RE: [CANSLIM] Forbes Magazine? Re: [CANSLIM] SYK Barron's on TV Talking Heads (was Re: [CANSLIM] SYK) Re: [CANSLIM] SYK Re: [CANSLIM] SYK ---------------------------------------------------------------------- Date: Wed, 20 Mar 2002 10:33:57 -0500 From: "Dan Marcotte" Subject: Re: [CANSLIM] Forbes Magazine? This is a multi-part message in MIME format. - ------=_NextPart_000_001A_01C1CFFA.BD7639A0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Jeff, It wasn't a regular issue. It was their ASAP edition dated Spring = 2002. Dan Marcotte ----- Original Message -----=20 From: Jeff Salisbury=20 To: canslim@lists.xmission.com=20 Sent: Wednesday, March 20, 2002 9:36 AM Subject: [CANSLIM] Forbes Magazine? Hello Canslimers,=20 For those of you who are new, my name is Jeff Salisbury and I'm the = owner and admin of the canslim email discussion group. We've had a = surge of new members join us during the last 1-2 weeks. I understand = that our list was referenced in Forbes magazine. Can anyone tell me the = Forbes issue and page number were we were referenced?=20 Regards,=20 Jeff - -To subscribe/unsubscribe, email "majordomo@xmission.com" -In = the email body, write "subscribe canslim" or -"unsubscribe canslim". Do = not use quotes in your email. - ------=_NextPart_000_001A_01C1CFFA.BD7639A0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Jeff, It wasn't a regular issue. It was their ASAP = edition=20 dated Spring 2002.
 
Dan Marcotte
----- Original Message -----
From:=20 Jeff Salisbury =
To: canslim@lists.xmission.com=
Sent: Wednesday, March 20, 2002 = 9:36=20 AM
Subject: [CANSLIM] Forbes = Magazine?

Hello Canslimers,=20

For those of you who are new, my name is Jeff Salisbury and I'm the = owner=20 and admin of the canslim email discussion group.  We've had a = surge of=20 new members join us during the last 1-2 weeks.  I understand that = our=20 list was referenced in Forbes magazine.  Can anyone tell me the = Forbes=20 issue and page number were we were referenced?=20

Regards,=20

Jeff - -To subscribe/unsubscribe, email "majordomo@xmission.com" = - -In the=20 email body, write "subscribe canslim" or -"unsubscribe canslim". Do = not use=20 quotes in your email.

- ------=_NextPart_000_001A_01C1CFFA.BD7639A0-- - - - -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: Wed, 20 Mar 2002 08:29:44 -0800 From: "Larry M. Powell" Subject: Re: [CANSLIM] Forbes Magazine? This is a multi-part message in MIME format. - ------=_NextPart_000_006B_01C1CFE9.635307C0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Jeff, I am traveling this week, I will scan and post when I get home, = unless someone gets it done first. Larry ----- Original Message -----=20 From: Jeff Salisbury=20 To: canslim@lists.xmission.com=20 Sent: Wednesday, March 20, 2002 6:36 AM Subject: [CANSLIM] Forbes Magazine? Hello Canslimers,=20 For those of you who are new, my name is Jeff Salisbury and I'm the = owner and admin of the canslim email discussion group. We've had a = surge of new members join us during the last 1-2 weeks. I understand = that our list was referenced in Forbes magazine. Can anyone tell me the = Forbes issue and page number were we were referenced?=20 Regards,=20 Jeff - -To subscribe/unsubscribe, email "majordomo@xmission.com" -In = the email body, write "subscribe canslim" or -"unsubscribe canslim". Do = not use quotes in your email.=20 - ------=_NextPart_000_006B_01C1CFE9.635307C0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Jeff,  I am traveling this week, I = will scan=20 and post when I get home, unless someone gets it done = first.
 
Larry
----- Original Message -----
From:=20 Jeff Salisbury =
To: canslim@lists.xmission.com=
Sent: Wednesday, March 20, 2002 = 6:36=20 AM
Subject: [CANSLIM] Forbes = Magazine?

Hello Canslimers,=20

For those of you who are new, my name is Jeff Salisbury and I'm the = owner=20 and admin of the canslim email discussion group.  We've had a = surge of=20 new members join us during the last 1-2 weeks.  I understand that = our=20 list was referenced in Forbes magazine.  Can anyone tell me the = Forbes=20 issue and page number were we were referenced?=20

Regards,=20

Jeff - -To subscribe/unsubscribe, email "majordomo@xmission.com" = - -In the=20 email body, write "subscribe canslim" or -"unsubscribe canslim". Do = not use=20 quotes in your email.

- ------=_NextPart_000_006B_01C1CFE9.635307C0-- - - - -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: Wed, 20 Mar 2002 11:35:46 -0500 From: "Duke Miller" Subject: RE: [CANSLIM] SYK This is a multi-part message in MIME format. - ------=_NextPart_000_0014_01C1D003.60982EB0 Content-Type: text/plain; charset="US-ASCII" Content-Transfer-Encoding: 7bit Charley, The results of your study would be very interesting to the group, I'm sure. Duke -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Chazmoore@aol.com Sent: Wednesday, March 20, 2002 7:00 AM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] SYK Tom: A few months ago one of the TV "bears" commented that a stock market recovery could not occur until the P/E ratio's fell significantly. In other words, stock prices are too high, or earnings too low. He noted that the S&P 500 Index P/E was (at the time) 28. Since I don't trust the S&P 500 Index averages I started to research the P/E ratio of Industry Groups, as defined by IBD. I am far from complete but my initial findings indicate that, with the exception of the technology sector, average P/E's really are not that high. Credit card companies like Capital One Finance (COF), and MBNA (KRB), have an average P/E of about 22; 8 points below the current S/P Index average. So, what is the point? I use this to determine if the stock P/E is in line with it's own industry. It could also be used to determine a target price to sell the stock in the future. While there are notable exceptions, (CSCO, QCOM, JDSU), most stocks get downgraded when they hit P/E ratios inconsistent with analyst projections, and this causes a price decline. (Maybe I have more time than sense.) Charley - ------=_NextPart_000_0014_01C1D003.60982EB0 Content-Type: text/html; charset="US-ASCII" Content-Transfer-Encoding: quoted-printable
Charley,
 
The results of = your study=20 would be very interesting to the group, I'm sure.
 
Duke
-----Original Message-----
From:=20 owner-canslim@lists.xmission.com=20 [mailto:owner-canslim@lists.xmission.com]On Behalf Of=20 Chazmoore@aol.com
Sent: Wednesday, March 20, 2002 7:00=20 AM
To: canslim@lists.xmission.com
Subject: Re: = [CANSLIM]=20 SYK

Tom: A few=20 months ago one of the TV "bears" commented that a stock market = recovery could=20 not occur until the P/E ratio's fell significantly. In other words, = stock=20 prices are too high, or earnings too low. He noted that the S&P = 500 Index=20 P/E was (at the time) 28. Since I don't trust the S&P 500 Index = averages I=20 started to research the P/E ratio of Industry Groups, as defined by = IBD. I am=20 far from complete but my initial findings indicate that, with the = exception of=20 the technology sector, average P/E's really are not that high. Credit = card=20 companies like Capital One Finance (COF), and MBNA (KRB), have an = average P/E=20 of about 22; 8 points below the current S/P Index average.
So, = what is the=20 point? I use this to determine if the stock P/E is in line with it's = own=20 industry. It could also be used to determine a target price to sell = the stock=20 in the future. While there are notable exceptions, (CSCO, QCOM, JDSU), = most=20 stocks get downgraded when they hit P/E ratios inconsistent with = analyst=20 projections, and this causes a price decline.
(Maybe I have more = time than=20 sense.)

Charley=20 =













- ------=_NextPart_000_0014_01C1D003.60982EB0-- - - - -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: Wed, 20 Mar 2002 11:38:29 EST From: Chazmoore@aol.com Subject: Re: [CANSLIM] SYK - --part1_44.1ced769d.29ca1505_boundary Content-Type: text/plain; charset="US-ASCII" Content-Transfer-Encoding: 7bit Duke: I will be happy to post my P/E study when complete. Charley - --part1_44.1ced769d.29ca1505_boundary Content-Type: text/html; charset="US-ASCII" Content-Transfer-Encoding: 7bit Duke: I will be happy to post my P/E study when complete.  Charley - --part1_44.1ced769d.29ca1505_boundary-- - - - -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: Wed, 20 Mar 2002 11:41:48 -0500 From: "Duke Miller" Subject: RE: [CANSLIM] Forbes Magazine? This is a multi-part message in MIME format. - ------=_NextPart_000_0018_01C1D004.382797D0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: 7bit Throw away those charts of the market. New tool to measure direction is the increase in members of canslim discussion group, provided the list increases at least 25% during past quarter and activity sustains at number of submissions equal to or above the average submissions at the time the list started to dwindle, provided, too, that this activity has even greater follow through in succeeding days. Bill O'Neil (aka Duke Miller) -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Ian Sent: Wednesday, March 20, 2002 10:31 AM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] Forbes Magazine? Does that mean we are in a bull market again :) ----- Original Message ----- From: Jeff Salisbury To: canslim@lists.xmission.com Sent: Wednesday, March 20, 2002 6:36 AM Subject: [CANSLIM] Forbes Magazine? Hello Canslimers, For those of you who are new, my name is Jeff Salisbury and I'm the owner and admin of the canslim email discussion group. We've had a surge of new members join us during the last 1-2 weeks. I understand that our list was referenced in Forbes magazine. Can anyone tell me the Forbes issue and page number were we were referenced? Regards, Jeff - -To subscribe/unsubscribe, email "majordomo@xmission.com" -In the email body, write "subscribe canslim" or -"unsubscribe canslim". Do not use quotes in your email. - ------=_NextPart_000_0018_01C1D004.382797D0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Throw away = those charts of=20 the market. 
 
New tool to = measure=20 direction is the increase in members of canslim discussion group, = provided the=20 list increases at least 25% during past quarter and activity sustains at = number=20 of submissions equal to or above the average submissions at the time the = list=20 started to dwindle, provided, too, that this activity has even greater = follow=20 through in succeeding days.
 
Bill O'Neil = (aka Duke=20 Miller)
 
 
-----Original Message-----
From:=20 owner-canslim@lists.xmission.com=20 [mailto:owner-canslim@lists.xmission.com]On Behalf Of=20 Ian
Sent: Wednesday, March 20, 2002 10:31 = AM
To:=20 canslim@lists.xmission.com
Subject: Re: [CANSLIM] Forbes=20 Magazine?

Does that mean we are in a bull market again = :)
----- Original Message -----
From:=20 Jeff Salisbury =
Sent: Wednesday, March 20, = 2002 6:36=20 AM
Subject: [CANSLIM] Forbes=20 Magazine?

Hello Canslimers,=20

For those of you who are new, my name is Jeff Salisbury and I'm = the owner=20 and admin of the canslim email discussion group.  We've had a = surge of=20 new members join us during the last 1-2 weeks.  I understand = that our=20 list was referenced in Forbes magazine.  Can anyone tell me the = Forbes=20 issue and page number were we were referenced?=20

Regards,=20

Jeff - -To subscribe/unsubscribe, email "majordomo@xmission.com" = - -In the=20 email body, write "subscribe canslim" or -"unsubscribe canslim". Do = not use=20 quotes in your email.

- ------=_NextPart_000_0018_01C1D004.382797D0-- - - - -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: Wed, 20 Mar 2002 10:56:18 -0600 From: "Katherine Malm" Subject: Re: [CANSLIM] SYK This is a multi-part message in MIME format. - ------=_NextPart_000_0087_01C1CFFD.DD307320 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Hi Charley, WON's studies from 1953 to 1985 showed that the average trailing PE for = great growth stocks was 20. When they peaked, they averaged a trailing = PE of 45, 2.25 the original levels. They then screened the best stocks = going into the market peak in March 2000 and found that the average PE = when they broke out was 44.8. When they peaked, they averaged a PE of = 99.6, surprisingly, 2.2 times their PE on breakout. (Investor's Corner = 6/9/00) His conclusion is that this does give some range of expectation = for PE expansion during the stock's run. One way I like to evaluate the industry is to look at the current PEs = relative to 5 year highs and lows. 5 years is often enough to catch at = least one and in some cases, more than one economic/market cycle. And I = wholeheartedly agree with you that comparing forward and/or trailing PEs = of a stock relative to its industry/direct competitors is a great way to = see if expectations are already built into the current price. I also = like to compare the stock's ROE against others in the same industry, as = it gives a measure of their relative ability to generate return on = capital employed. It would be great to see the results from your study. Katherine ----- Original Message -----=20 From: Duke Miller=20 To: canslim@lists.xmission.com=20 Sent: Wednesday, March 20, 2002 10:35 AM Subject: RE: [CANSLIM] SYK Charley, The results of your study would be very interesting to the group, I'm = sure. Duke -----Original Message----- From: owner-canslim@lists.xmission.com = [mailto:owner-canslim@lists.xmission.com]On Behalf Of Chazmoore@aol.com Sent: Wednesday, March 20, 2002 7:00 AM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] SYK Tom: A few months ago one of the TV "bears" commented that a stock = market recovery could not occur until the P/E ratio's fell = significantly. In other words, stock prices are too high, or earnings = too low. He noted that the S&P 500 Index P/E was (at the time) 28. Since = I don't trust the S&P 500 Index averages I started to research the P/E = ratio of Industry Groups, as defined by IBD. I am far from complete but = my initial findings indicate that, with the exception of the technology = sector, average P/E's really are not that high. Credit card companies = like Capital One Finance (COF), and MBNA (KRB), have an average P/E of = about 22; 8 points below the current S/P Index average.=20 So, what is the point? I use this to determine if the stock P/E is = in line with it's own industry. It could also be used to determine a = target price to sell the stock in the future. While there are notable = exceptions, (CSCO, QCOM, JDSU), most stocks get downgraded when they hit = P/E ratios inconsistent with analyst projections, and this causes a = price decline.=20 (Maybe I have more time than sense.)=20 Charley=20 - ------=_NextPart_000_0087_01C1CFFD.DD307320 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Hi Charley,
 
WON's studies from 1953 to 1985 showed that the average trailing PE = for=20 great growth stocks was 20. When they peaked, they averaged a trailing = PE of 45,=20 2.25 the original levels. They then screened the best stocks going into = the=20 market peak in March 2000 and found that the average PE when they broke = out was=20 44.8. When they peaked, they averaged a PE of 99.6, surprisingly, 2.2 = times=20 their PE on breakout. (Investor's Corner 6/9/00) His conclusion is that = this=20 does give some range of expectation for PE expansion during the stock's=20 run.
 
One way I like to evaluate the industry is to look at the current = PEs=20 relative to 5 year highs and lows. 5 years is often enough to catch at = least one=20 and in some cases, more than one economic/market cycle. And I = wholeheartedly=20 agree with you that comparing forward and/or trailing PEs of a stock = relative to=20 its industry/direct competitors is a great way to see if expectations = are=20 already built into the current price. I also like to compare the stock's = ROE=20 against others in the same industry, as it gives a measure of their = relative=20 ability to generate return on capital employed.
 
It would be great to see the results from your study.
 
Katherine
----- Original Message -----
From:=20 Duke=20 Miller
Sent: Wednesday, March 20, 2002 = 10:35=20 AM
Subject: RE: [CANSLIM] = SYK

Charley,
 
The results = of your study=20 would be very interesting to the group, I'm sure.
 
Duke
-----Original Message-----
From: owner-canslim@lists.xmis= sion.com=20 [mailto:owner-canslim@lists.xmission.com]On Behalf Of Chazmoore@aol.com
Sent:=20 Wednesday, March 20, 2002 7:00 AM
To: canslim@lists.xmission.com=
Subject:=20 Re: [CANSLIM] SYK

Tom: A few months ago one of the TV "bears" commented that = a stock=20 market recovery could not occur until the P/E ratio's fell = significantly. In=20 other words, stock prices are too high, or earnings too low. He = noted that=20 the S&P 500 Index P/E was (at the time) 28. Since I don't trust = the=20 S&P 500 Index averages I started to research the P/E ratio of = Industry=20 Groups, as defined by IBD. I am far from complete but my initial = findings=20 indicate that, with the exception of the technology sector, average = P/E's=20 really are not that high. Credit card companies like Capital One = Finance=20 (COF), and MBNA (KRB), have an average P/E of about 22; 8 points = below the=20 current S/P Index average.
So, what is the point? I use this to=20 determine if the stock P/E is in line with it's own industry. It = could also=20 be used to determine a target price to sell the stock in the future. = While=20 there are notable exceptions, (CSCO, QCOM, JDSU), most stocks get = downgraded=20 when they hit P/E ratios inconsistent with analyst projections, and = this=20 causes a price decline.
(Maybe I have more time than sense.)=20

Charley=20 =













- ------=_NextPart_000_0087_01C1CFFD.DD307320-- - - - -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: Wed, 20 Mar 2002 09:59:10 -0700 From: Warren Keuffel Subject: Barron's on TV Talking Heads (was Re: [CANSLIM] SYK) Re: TV "bears" This week's Barron's has a wonderful article by a freelancer who captured the almost total lack of negative news on CNBC. He finished the piece comparing CNBC to an infomercial, but with less integrity. A hoot and a half, highly recommended reading! Warren Duke Miller wrote: > Charley, > > > > The results of your study would be very interesting to the group, I'm > sure. > > > > Duke > > -----Original Message----- > From: owner-canslim@lists.xmission.com > [mailto:owner-canslim@lists.xmission.com] On Behalf Of > Chazmoore@aol.com > Sent: Wednesday, March 20, 2002 7:00 AM > To: canslim@lists.xmission.com > Subject: Re: [CANSLIM] SYK > > Tom: A few months ago one of the TV "bears" commented that a stock > market recovery could not occur until the P/E ratio's fell > significantly. In other words, stock prices are too high, or > earnings too low. He noted that the S&P 500 Index P/E was (at the > time) 28. Since I don't trust the S&P 500 Index averages I started > to research the P/E ratio of Industry Groups, as defined by IBD. I > am far from complete but my initial findings indicate that, with > the exception of the technology sector, average P/E's really are > not that high. Credit card companies like Capital One Finance > (COF), and MBNA (KRB), have an average P/E of about 22; 8 points > below the current S/P Index average. > So, what is the point? I use this to determine if the stock P/E is > in line with it's own industry. It could also be used to determine > a target price to sell the stock in the future. While there are > notable exceptions, (CSCO, QCOM, JDSU), most stocks get downgraded > when they hit P/E ratios inconsistent with analyst projections, > and this causes a price decline. > (Maybe I have more time than sense.) > > Charley > > > > > > > > > > > > > - - - -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: Wed, 20 Mar 2002 11:59:25 EST From: Chazmoore@aol.com Subject: Re: [CANSLIM] SYK - --part1_ce.2372acdd.29ca19ed_boundary Content-Type: text/plain; charset="US-ASCII" Content-Transfer-Encoding: 7bit Thank you Katherine. That is good information I can use. You give me the incentive to speed up my study. Charley - --part1_ce.2372acdd.29ca19ed_boundary Content-Type: text/html; charset="US-ASCII" Content-Transfer-Encoding: 7bit Thank you Katherine. That is good information I can use.  You give me the incentive to speed up my study. Charley - --part1_ce.2372acdd.29ca19ed_boundary-- - - - -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: Wed, 20 Mar 2002 11:04:12 -0600 From: "Katherine Malm" Subject: Re: [CANSLIM] SYK This is a multi-part message in MIME format. - ------=_NextPart_000_00A4_01C1CFFE.F78DE940 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Oops... "trailing PE for great growth stocks at breakout was 20" ----- Original Message -----=20 From: Katherine Malm=20 To: canslim@lists.xmission.com=20 Sent: Wednesday, March 20, 2002 10:56 AM Subject: Re: [CANSLIM] SYK Hi Charley, WON's studies from 1953 to 1985 showed that the average trailing PE = for great growth stocks was 20. When they peaked, they averaged a = trailing PE of 45, 2.25 the original levels. They then screened the best = stocks going into the market peak in March 2000 and found that the = average PE when they broke out was 44.8. When they peaked, they averaged = a PE of 99.6, surprisingly, 2.2 times their PE on breakout. (Investor's = Corner 6/9/00) His conclusion is that this does give some range of = expectation for PE expansion during the stock's run. One way I like to evaluate the industry is to look at the current PEs = relative to 5 year highs and lows. 5 years is often enough to catch at = least one and in some cases, more than one economic/market cycle. And I = wholeheartedly agree with you that comparing forward and/or trailing PEs = of a stock relative to its industry/direct competitors is a great way to = see if expectations are already built into the current price. I also = like to compare the stock's ROE against others in the same industry, as = it gives a measure of their relative ability to generate return on = capital employed. It would be great to see the results from your study. Katherine ----- Original Message -----=20 From: Duke Miller=20 To: canslim@lists.xmission.com=20 Sent: Wednesday, March 20, 2002 10:35 AM Subject: RE: [CANSLIM] SYK Charley, The results of your study would be very interesting to the group, = I'm sure. Duke -----Original Message----- From: owner-canslim@lists.xmission.com = [mailto:owner-canslim@lists.xmission.com]On Behalf Of Chazmoore@aol.com Sent: Wednesday, March 20, 2002 7:00 AM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] SYK Tom: A few months ago one of the TV "bears" commented that a stock = market recovery could not occur until the P/E ratio's fell = significantly. In other words, stock prices are too high, or earnings = too low. He noted that the S&P 500 Index P/E was (at the time) 28. Since = I don't trust the S&P 500 Index averages I started to research the P/E = ratio of Industry Groups, as defined by IBD. I am far from complete but = my initial findings indicate that, with the exception of the technology = sector, average P/E's really are not that high. Credit card companies = like Capital One Finance (COF), and MBNA (KRB), have an average P/E of = about 22; 8 points below the current S/P Index average.=20 So, what is the point? I use this to determine if the stock P/E is = in line with it's own industry. It could also be used to determine a = target price to sell the stock in the future. While there are notable = exceptions, (CSCO, QCOM, JDSU), most stocks get downgraded when they hit = P/E ratios inconsistent with analyst projections, and this causes a = price decline.=20 (Maybe I have more time than sense.)=20 Charley=20 - ------=_NextPart_000_00A4_01C1CFFE.F78DE940 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Oops... "trailing PE for great growth stocks at breakout = was=20 20"
----- Original Message -----
From:=20 Katherine=20 Malm
Sent: Wednesday, March 20, 2002 = 10:56=20 AM
Subject: Re: [CANSLIM] = SYK

Hi Charley,
 
WON's studies from 1953 to 1985 showed that the average trailing = PE for=20 great growth stocks was 20. When they peaked, they averaged a trailing = PE of=20 45, 2.25 the original levels. They then screened the best stocks going = into=20 the market peak in March 2000 and found that the average PE when they = broke=20 out was 44.8. When they peaked, they averaged a PE of 99.6, = surprisingly, 2.2=20 times their PE on breakout. (Investor's Corner 6/9/00) His conclusion = is that=20 this does give some range of expectation for PE expansion during the = stock's=20 run.
 
One way I like to evaluate the industry is to look at the current = PEs=20 relative to 5 year highs and lows. 5 years is often enough to catch at = least=20 one and in some cases, more than one economic/market cycle. And I=20 wholeheartedly agree with you that comparing forward and/or trailing = PEs of a=20 stock relative to its industry/direct competitors is a great way to = see if=20 expectations are already built into the current price. I also like to = compare=20 the stock's ROE against others in the same industry, as it gives a = measure of=20 their relative ability to generate return on capital employed.
 
It would be great to see the results from your study.
 
Katherine
----- Original Message -----
From:=20 Duke Miller
Sent: Wednesday, March 20, = 2002 10:35=20 AM
Subject: RE: [CANSLIM] = SYK

Charley,
 
The results = of your=20 study would be very interesting to the group, I'm = sure.
 
Duke
-----Original Message-----
From: owner-canslim@lists.xmis= sion.com=20 [mailto:owner-canslim@lists.xmission.com]On Behalf Of Chazmoore@aol.com
Sent:=20 Wednesday, March 20, 2002 7:00 AM
To: canslim@lists.xmission.com=
Subject:=20 Re: [CANSLIM] SYK

Tom: A few months ago one of the TV "bears" commented = that a stock=20 market recovery could not occur until the P/E ratio's fell = significantly.=20 In other words, stock prices are too high, or earnings too low. He = noted=20 that the S&P 500 Index P/E was (at the time) 28. Since I don't = trust=20 the S&P 500 Index averages I started to research the P/E ratio = of=20 Industry Groups, as defined by IBD. I am far from complete but my = initial=20 findings indicate that, with the exception of the technology = sector,=20 average P/E's really are not that high. Credit card companies like = Capital=20 One Finance (COF), and MBNA (KRB), have an average P/E of about = 22; 8=20 points below the current S/P Index average.
So, what is the = point? I=20 use this to determine if the stock P/E is in line with it's own = industry.=20 It could also be used to determine a target price to sell the = stock in the=20 future. While there are notable exceptions, (CSCO, QCOM, JDSU), = most=20 stocks get downgraded when they hit P/E ratios inconsistent with = analyst=20 projections, and this causes a price decline.
(Maybe I have = more time=20 than sense.)

Charley=20 =













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