From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #2425 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 Thursday, May 16 2002 Volume 02 : Number 2425 In this issue: RE: TOO (was:[CANSLIM] WebLinks) Re: TOO (was:[CANSLIM] WebLinks) [CANSLIM] Re: Mining criteria (was: TOO ) [CANSLIM] CCRN [CANSLIM] Homebuilders and stuff [CANSLIM] Help Needed RE: [CANSLIM] Help Needed ---------------------------------------------------------------------- Date: Thu, 16 May 2002 12:43:10 -0400 From: "Duke Miller" Subject: RE: TOO (was:[CANSLIM] WebLinks) This is a multi-part message in MIME format. - ------=_NextPart_000_0016_01C1FCD7.3CCE0F30 Content-Type: text/plain; charset="US-ASCII" Content-Transfer-Encoding: 7bit Great summation, K....You've done it again! Duke - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com] On Behalf Of Katherine Malm Sent: Thursday, May 16, 2002 12:29 PM To: canslim@lists.xmission.com Subject: Re: TOO (was:[CANSLIM] WebLinks) Patrick, You've been reading my mind!! Couldn't agree with you more. Since really spending time getting to the heart of CANSLIM, I concluded that technical strength combined with minimum growth characteristics and an identifiable strategic advantage are the most important aspects. Here's how I go about finding the candidates in more specific terms: "Must Have" ========= Minimum Technicals: RS>=60 and <70 + RS rising--minimum starting point for watch list RS>=70 (min at purchase) Price >= -15% of 50dMA Price >= 200 dMA A/D = A, B, C (prefer A or B on purchase) Minimum Fundamentals: Forward growth rate >=15 Expected return based on Current Price, past profitability & EPS estimates >= return on AAA bonds (this from VectorVest, RV>=1 and a simple measure of risk/reward) Cash Flow positive "N" = identifiable strategic advantage that makes the stock and/or the industry a "L"eader with fuel for future growth The last two can't be easily filtered, so require due diligence. (Cash flow is unreliable in stock screeners because you don't always know whether they are using fiscal, trailing 12 months, prior reported year, etc.) Sound technical pattern on break out and/or pullback entry. "Sorting/Elimination/Preference Criteria" =========================== Operating Cash flow nearly equal to EPS (a quick way to identify accounting red flags) EPS and Revs growing (prefer >=20%, if a turnaround, at least 2 quarters of growth) ROE (prefer >=17%) D/E (prefer <=50%) % Institutional ownership (prefer 10-40%) At least one other stock that is a direct competitor or is in the same industry is also in similar technical shape (only exception is when the company's product/market is so unique that there is no obvious publicly traded competitor ) General industry strength (prefer the same RS requirements as with the stock--This acts more as a "draw your eye to strength" indicator for the above condition) These last items I don't filter for, but the more of the minimums the stock meets, the more "points" the stock gets. All else being equal in the "must haves", this sorts the cream to the top of the list. Katherine - ----- Original Message ----- From: Patrick Wahl To: canslim@lists.xmission.com Sent: Thursday, May 16, 2002 10:33 AM Subject: RE: TOO (was:[CANSLIM] WebLinks) It is a little hard sometimes, and as has been mentioned, most people practice some modified form of CANSLIM. I've tried to see what the underlying idea is to the whole thing, and I think it gets down to a few things that make sense to me - - -You want to time your buy so you get in when a stock is making a move, and you have a reasonable risk point if you are wrong. - -You are looking for strong growth companies. - -You are looking for something new, something that is a catalyst for strong and hopefully sustained growth in a company, like a new product, a new industry (see the internet, or the networking market of the early nineties as new industries). All the other stuff is somewhat peripheral, I think, guess there is room for argument there, but basically you want growth (a company executing well) and a company in a growing industry (the old expanding pie idea). I guess I like the letters CANLM the best. On 16 May 2002 at 11:09, Duke Miller wrote: > Thanks Patrick and Tom. > > I'm narrowing my MUST criteria more as time goes on. Got any darts you > want to sell me!?!? - ------=_NextPart_000_0016_01C1FCD7.3CCE0F30 Content-Type: text/html; charset="US-ASCII" Content-Transfer-Encoding: quoted-printable Message
Great = summation,=20 K....You've done it again!
 
Duke
-----Original Message-----
From:=20 owner-canslim@lists.xmission.com = [mailto:owner-canslim@lists.xmission.com]=20 On Behalf Of Katherine Malm
Sent: Thursday, May 16, = 2002=20 12:29 PM
To: canslim@lists.xmission.com
Subject: = Re: TOO=20 (was:[CANSLIM] WebLinks)

Patrick,
 
You've been reading my mind!! Couldn't agree with you more. Since = really=20 spending time getting to the heart of CANSLIM, I concluded that = technical=20 strength combined with minimum growth characteristics and an = identifiable=20 strategic advantage are the most important aspects. Here's how I go = about=20 finding the candidates in more specific terms:
 
"Must Have"
=3D=3D=3D=3D=3D=3D=3D=3D=3D
Minimum Technicals:
RS>=3D60 and <70 + RS rising--minimum starting point for = watch=20 list
RS>=3D70 (min at purchase)
Price >=3D -15% of 50dMA
Price >=3D 200 dMA
A/D =3D A, B, C (prefer A or B on purchase)
Minimum Fundamentals:
Forward growth rate >=3D15
Expected return based on Current Price, past profitability & = EPS=20 estimates >=3D return on AAA bonds (this from VectorVest, = RV>=3D1 and a=20 simple measure of risk/reward)
Cash Flow positive
"N" =3D identifiable strategic advantage that makes the stock = and/or the=20 industry a "L"eader with fuel for future growth
The last two can't be easily filtered, so require due diligence. = (Cash=20 flow is unreliable in stock screeners because you don't always know = whether=20 they are using fiscal, trailing 12 months, prior reported year, = etc.)
Sound technical pattern on break out and/or pullback entry.
 
"Sorting/Elimination/Preference Criteria"
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D
Operating Cash flow nearly equal to EPS (a quick way to identify=20 accounting red flags)
EPS and Revs growing (prefer >=3D20%, if a turnaround, at = least 2=20 quarters of growth)
ROE (prefer >=3D17%)
D/E (prefer <=3D50%)
% Institutional ownership (prefer 10-40%)
At least one other stock that is a direct competitor or is in the = same=20 industry is also in similar technical shape (only exception is when = the=20 company's product/market is so unique that there is no obvious = publicly traded=20 competitor )
General industry strength (prefer the same RS requirements as = with the=20 stock--This acts more as a "draw your eye to strength" indicator for = the above=20 condition)
These last items I don't filter for, but the more of the minimums = the=20 stock meets, the more "points" the stock gets. All else being equal in = the=20 "must haves", this sorts the cream to the top of the list.
 
Katherine
----- Original Message -----
From:=20 Patrick = Wahl=20
Sent: Thursday, May 16, 2002 = 10:33=20 AM
Subject: RE: TOO = (was:[CANSLIM]=20 WebLinks)

It is a little hard sometimes, and as has been = mentioned,=20 most people practice
some modified form of CANSLIM.  I've = tried to=20 see what the underlying idea is to
the whole thing, and I think = it gets=20 down to a few things that make sense to me -

-You want to = time your=20 buy so you get in when a stock is making a move, and you
have a=20 reasonable risk point if you are wrong.
-You are looking for = strong=20 growth companies.
-You are looking for something new, something = that is a=20 catalyst for strong and
hopefully sustained growth in a company, = like a=20 new product, a new industry (see
the internet, or the networking = market=20 of the early nineties as new industries).

All the other stuff = is=20 somewhat peripheral, I think, guess there is room for argument =
there,=20 but basically you want growth (a company executing well) and a = company in=20
a growing industry (the old expanding pie idea).  I guess I = like=20 the letters CANLM the
best.

On 16 May 2002 at 11:09, Duke = Miller=20 wrote:

> Thanks Patrick and Tom.
>
> I'm = narrowing my=20 MUST criteria more as time goes on.  Got any darts you
> = want to=20 sell me!?!?
- ------=_NextPart_000_0016_01C1FCD7.3CCE0F30-- - - - -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: Thu, 16 May 2002 13:44:28 EDT From: Spencer48@aol.com Subject: Re: TOO (was:[CANSLIM] WebLinks) Katherine: Cash-Flow is a good item to check to see if earnings are at least equal to the money coming in. However, to me it would seem that this test would only be valid for companies that needn't invest in a lot of R&D (eg. consumer and retail companies). Companies with a lot of R&D (which are a % of sales, and which are deducted from earnings as an expense and not added back in to arrive at Cash-Flow) would seem to be an exception to your hard and fast Cash-Flow rule (ie. Cash-Flow positive). Moreover, it would seem to me that companies which are investing in a lot of R&D would be the same companies which WON suggests are in the most dynamic and rewarding industries (eg. technology stocks or biomed stocks). I'll give you an example of a stock which has poor cash-flow, but has a very high R&D: ENZN. One of the reasons I'm looking at it is because of its sparkling earnings and sales (sequential, quarterly, and yearly). Of course, the chart looks terrible, but its fundamentals (as far as I'm concerned) even with its poor cash-flow, does not eliminate it. jans In a message dated 5/16/2002 12:31:05 PM Eastern Daylight Time, kmalm@earthlink.net writes: << Patrick, You've been reading my mind!! Couldn't agree with you more. Since really spending time getting to the heart of CANSLIM, I concluded that technical strength combined with minimum growth characteristics and an identifiable strategic advantage are the most important aspects. Here's how I go about finding the candidates in more specific terms: "Must Have" ========= Minimum Technicals: RS>=60 and <70 + RS rising--minimum starting point for watch list RS>=70 (min at purchase) Price >= -15% of 50dMA Price >= 200 dMA A/D = A, B, C (prefer A or B on purchase) Minimum Fundamentals: Forward growth rate >=15 Expected return based on Current Price, past profitability & EPS estimates >= return on AAA bonds (this from VectorVest, RV>=1 and a simple measure of risk/reward) Cash Flow positive "N" = identifiable strategic advantage that makes the stock and/or the industry a "L"eader with fuel for future growth The last two can't be easily filtered, so require due diligence. (Cash flow is unreliable in stock screeners because you don't always know whether they are using fiscal, trailing 12 months, prior reported year, etc.) Sound technical pattern on break out and/or pullback entry. "Sorting/Elimination/Preference Criteria" =========================== Operating Cash flow nearly equal to EPS (a quick way to identify accounting red flags) EPS and Revs growing (prefer >=20%, if a turnaround, at least 2 quarters of growth) ROE (prefer >=17%) D/E (prefer <=50%) % Institutional ownership (prefer 10-40%) At least one other stock that is a direct competitor or is in the same industry is also in similar technical shape (only exception is when the company's product/market is so unique that there is no obvious publicly traded competitor ) General industry strength (prefer the same RS requirements as with the stock--This acts more as a "draw your eye to strength" indicator for the above condition) These last items I don't filter for, but the more of the minimums the stock meets, the more "points" the stock gets. All else being equal in the "must haves", this sorts the cream to the top of the list. >> - - - -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: Thu, 16 May 2002 13:00:03 -0500 From: "Katherine Malm" Subject: [CANSLIM] Re: Mining criteria (was: TOO ) This is a multi-part message in MIME format. - ------=_NextPart_000_000D_01C1FCD9.9879B3A0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Hi jans, I understand your point, but I see that my notes were not clear. When I say "cash flow positive" I mean that the *actual* cash flow is = positive. In ENZN's case, they *do* have a positive cash flow. Contrast = this to AMZN, which can't seem to rub 2 dimes together and are = consistently cash flow negative. That means that *real* dollars are = flowing OUT of the company. If I did that long enough in my personal = life, I'd be broke! When I say "operating cash flow vs. EPS" I mean the operating cash flow = (which is the earnings with one time charges, etc. added back in) vs. = the EPS, should be close. I don't eliminate based on this, but use it to = identify possible accounting problems, where the earnings might look = super, but they are cooking the pro forma numbers. IBM is a good recent = example of this. If a company were reinvesting earnings into R&D etc, = then that would be a good thing--if and only if they don't spend more = real cash than they take in. I know that early stage biotechs, etc. are = famous for being cash flow negative, but I'd rather not dive in, = especially in an uncertain market. There are a few good Tier 1 biotechs = that are cash flow positive, earnings negative. I'm ok with that as long = as they have financial strength and a promising pipeline. (By the way, = since we're on biotech, there's an excellent book called "The Biotech = Investor's Bible" by George Wolff which I've found very helpful in = understanding this complicated industry.) Of course, none of this = matters as long as the biotech industry group is in the dumpers! Katherine ----- Original Message -----=20 From: Spencer48@aol.com=20 To: canslim@lists.xmission.com=20 Sent: Thursday, May 16, 2002 12:44 PM Subject: Re: TOO (was:[CANSLIM] WebLinks) Katherine: Cash-Flow is a good item to check to see if earnings are at least = equal=20 to the money coming in. However, to me it would seem that this test = would=20 only be valid for companies that needn't invest in a lot of R&D (eg. = consumer=20 and retail companies). Companies with a lot of R&D (which are a % of sales, and which = are=20 deducted from earnings as an expense and not added back in to arrive = at=20 Cash-Flow) would seem to be an exception to your hard and fast = Cash-Flow rule=20 (ie. Cash-Flow positive).=20 Moreover, it would seem to me that companies which are investing = in a=20 lot of R&D would be the same companies which WON suggests are in the = most=20 dynamic and rewarding industries (eg. technology stocks or biomed = stocks). I'll give you an example of a stock which has poor cash-flow, but = has a=20 very high R&D: ENZN. One of the reasons I'm looking at it is because = of its=20 sparkling earnings and sales (sequential, quarterly, and yearly). Of = course,=20 the chart looks terrible, but its fundamentals (as far as I'm = concerned) even=20 with its poor cash-flow, does not eliminate it. jans In a message dated 5/16/2002 12:31:05 PM Eastern Daylight Time,=20 kmalm@earthlink.net writes: << Patrick, =20 You've been reading my mind!! Couldn't agree with you more. Since = really=20 spending time getting to the heart of CANSLIM, I concluded that = technical=20 strength combined with minimum growth characteristics and an = identifiable=20 strategic advantage are the most important aspects. Here's how I go = about=20 finding the candidates in more specific terms: =20 "Must Have" =3D=3D=3D=3D=3D=3D=3D=3D=3D Minimum Technicals: RS>=3D60 and <70 + RS rising--minimum starting point for watch list RS>=3D70 (min at purchase) Price >=3D -15% of 50dMA Price >=3D 200 dMA A/D =3D A, B, C (prefer A or B on purchase) Minimum Fundamentals: Forward growth rate >=3D15 Expected return based on Current Price, past profitability & EPS = estimates=20 >=3D return on AAA bonds (this from VectorVest, RV>=3D1 and a simple = measure of=20 risk/reward) Cash Flow positive "N" =3D identifiable strategic advantage that makes the stock and/or = the=20 industry a "L"eader with fuel for future growth The last two can't be easily filtered, so require due diligence. = (Cash flow=20 is unreliable in stock screeners because you don't always know whether = they=20 are using fiscal, trailing 12 months, prior reported year, etc.) Sound technical pattern on break out and/or pullback entry. =20 "Sorting/Elimination/Preference Criteria" = =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D Operating Cash flow nearly equal to EPS (a quick way to identify = accounting=20 red flags) EPS and Revs growing (prefer >=3D20%, if a turnaround, at least 2 = quarters of=20 growth) ROE (prefer >=3D17%) D/E (prefer <=3D50%) % Institutional ownership (prefer 10-40%) At least one other stock that is a direct competitor or is in the = same=20 industry is also in similar technical shape (only exception is when = the=20 company's product/market is so unique that there is no obvious = publicly=20 traded competitor ) General industry strength (prefer the same RS requirements as with = the=20 stock--This acts more as a "draw your eye to strength" indicator for = the=20 above condition) These last items I don't filter for, but the more of the minimums the = stock=20 meets, the more "points" the stock gets. All else being equal in the = "must=20 haves", this sorts the cream to the top of the list. >> - -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_000D_01C1FCD9.9879B3A0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Hi jans,
 
I understand your point, but I see that my notes were not = clear.
 
When I say "cash flow positive" I mean that the *actual* cash flow = is=20 positive. In ENZN's case, they *do* have a positive cash flow. Contrast = this to=20 AMZN, which can't seem to rub 2 dimes together and are consistently cash = flow=20 negative. That means that *real* dollars are flowing OUT of the company. = If I=20 did that long enough in my personal life, I'd be broke!
 
When I say "operating cash flow vs. EPS" I mean the operating cash = flow=20 (which is the earnings with one time charges, etc. added back in) vs. = the EPS,=20 should be close. I don't eliminate based on this, but use it to identify = possible accounting problems, where the earnings might look super, but = they are=20 cooking the pro forma numbers. IBM is a good recent example of this. If = a=20 company were reinvesting earnings into R&D etc, then that would be a = good=20 thing--if and only if they don't spend more real cash than they take in. = I know=20 that early stage biotechs, etc. are famous for being cash flow negative, = but I'd=20 rather not dive in, especially in an uncertain market. There are a few = good Tier=20 1 biotechs that are cash flow positive, earnings negative. I'm ok with = that as=20 long as they have financial strength and a promising pipeline. (By the = way,=20 since we're on biotech, there's an excellent book called "The Biotech = Investor's=20 Bible" by George Wolff which I've found very helpful in understanding = this=20 complicated industry.) Of course, none of this matters as long as the = biotech=20 industry group is in the dumpers!
 
Katherine
----- Original Message -----
From:=20 Spencer48@aol.com
Sent: Thursday, May 16, 2002 = 12:44=20 PM
Subject: Re: TOO (was:[CANSLIM] = WebLinks)

Katherine:

     Cash-Flow is = a good=20 item to check to see if earnings are at least equal
to the money = coming=20 in.  However, to me it would seem that this test would
only = be valid=20 for companies that needn't invest in a lot of R&D (eg. consumer =
and=20 retail companies).

     Companies with a = lot of=20 R&D (which are a % of sales, and which are
deducted from = earnings as=20 an expense and not added back in to arrive at
Cash-Flow) would = seem to be=20 an exception to your hard and fast Cash-Flow rule
(ie. Cash-Flow=20 positive).

     Moreover, it would seem to = me that=20 companies which are investing in a
lot of R&D would be the = same=20 companies which WON suggests are in the most
dynamic and rewarding = industries (eg. technology stocks or biomed=20 stocks).

     I'll give you an example of a = stock=20 which has poor cash-flow, but has a
very high R&D:  = ENZN. =20 One of the reasons I'm looking at it is because of its
sparkling = earnings=20 and sales (sequential, quarterly, and yearly).  Of course, =
the chart=20 looks terrible, but its fundamentals (as far as I'm concerned) even =
with=20 its poor cash-flow, does not eliminate it.

jans


In a = message=20 dated 5/16/2002 12:31:05 PM Eastern Daylight Time,
kmalm@earthlink.net=20 writes:

<< Patrick,
 
 You've been = reading my=20 mind!! Couldn't agree with you more. Since really
spending time = getting to=20 the heart of CANSLIM, I concluded that technical
strength combined = with=20 minimum growth characteristics and an identifiable
strategic = advantage are=20 the most important aspects. Here's how I go about
finding the = candidates=20 in more specific terms:
 
 "Must=20 Have"
 =3D=3D=3D=3D=3D=3D=3D=3D=3D
 Minimum = Technicals:
 RS>=3D60 and=20 <70 + RS rising--minimum starting point for watch = list
 RS>=3D70=20 (min at purchase)
 Price >=3D -15% of 50dMA
 Price = >=3D 200=20 dMA
 A/D =3D A, B, C (prefer A or B on = purchase)
 Minimum=20 Fundamentals:
 Forward growth rate >=3D15
 Expected = return=20 based on Current Price, past profitability & EPS estimates =
>=3D=20 return on AAA bonds (this from VectorVest, RV>=3D1 and a simple = measure of=20
risk/reward)
 Cash Flow positive
 "N" =3D = identifiable=20 strategic advantage that makes the stock and/or the
industry a = "L"eader=20 with fuel for future growth
 The last two can't be easily = filtered, so=20 require due diligence. (Cash flow
is unreliable in stock screeners = because=20 you don't always know whether they
are using fiscal, trailing 12 = months,=20 prior reported year, etc.)
 Sound technical pattern on break = out=20 and/or pullback = entry.
 
 "Sorting/Elimination/Preference=20 = Criteria"
 =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D
 Operating Cash flow=20 nearly equal to EPS (a quick way to identify accounting
red=20 flags)
 EPS and Revs growing (prefer >=3D20%, if a = turnaround, at=20 least 2 quarters of
growth)
 ROE (prefer = >=3D17%)
 D/E=20 (prefer <=3D50%)
 % Institutional ownership (prefer=20 10-40%)
 At least one other stock that is a direct competitor = or is in=20 the same
industry is also in similar technical shape (only = exception is=20 when the
company's product/market is so unique that there is no = obvious=20 publicly
traded competitor )
 General industry strength = (prefer=20 the same RS requirements as with the
stock--This acts more as a = "draw your=20 eye to strength" indicator for the
above condition)
 These = last=20 items I don't filter for, but the more of the minimums the stock =
meets,=20 the more "points" the stock gets. All else being equal in the "must=20
haves", this sorts the cream to the top of the list.
 =20 >>

-
-To subscribe/unsubscribe, email "majordomo@xmission.com"
-In= the=20 email body, write "subscribe canslim" or
-"unsubscribe = canslim".  Do=20 not use quotes in your email. - ------=_NextPart_000_000D_01C1FCD9.9879B3A0-- - - - -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: Thu, 16 May 2002 12:28:45 -0700 (PDT) From: Eric Jaenike Subject: [CANSLIM] CCRN - --0-133894978-1021577325=:48077 Content-Type: text/plain; charset=us-ascii Continuation from breakout or breakout from C and H today, depending on how you want to interpret it. Eric - --------------------------------- Do You Yahoo!? LAUNCH - Your Yahoo! Music Experience - --0-133894978-1021577325=:48077 Content-Type: text/html; charset=us-ascii

Continuation from breakout or breakout from C and H today, depending on how you want to interpret it.

Eric


Do You Yahoo!?
LAUNCH - Your Yahoo! Music Experience - --0-133894978-1021577325=:48077-- - - - -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: Thu, 16 May 2002 13:28:20 -0700 (PDT) From: Eric Jaenike Subject: [CANSLIM] Homebuilders and stuff - --0-937196825-1021580900=:60028 Content-Type: text/plain; charset=us-ascii A couple of points to note on the homebuilders (please note: I currently have no position in them, but am keeping a close eye on them as a short, so that's my bias): 1. The stocks have become a bit bifurcated. The weaker players in the industry have not been performing well (CTX, BZH, DHI, LEN etc), while the leaders have been doing well (RYL, NVR). I consider this to be an early sign of weakness, not strength, as the laggards have stopped performing. 2. HOV and WLS have clearly broken uptrend lines in the last week. KBH and NVR appear poised to do the same. 3. Vice Chairman of Toll Brothers, Bruce Toll, filed to sell 1 million of his 3 million shares. (For accuracies sake, in a press release he stated he has sold only 700k, and has no intention of selling the rest. Whatever.) . There was additional insider selling in CTX this morning as well. This goes hand in hand with all the other recent insider selling. These stocks seem to be highly inversely correlated with strength in the economy (via interest rates). I would be extremely careful if I was long these stocks right now. (I am, in fact, looking for short entry points. HOV on a bounce is probably a good entry point. Anyone have feedback/ ideas on entry points?) ON M: I am somwhat skeptical of this recent rally. Following up on my previous post on M, note the action on the Russell 2000 today (-1.2%), as well as IJS (-2%). I don't consider this definitive by any means, but I don't consider it bullish that the leading indices (small cap orientation) have continued their underperformance. In evaluating this recent rally off the lows, IMO there have been several yellow flags, including: 1. The markets never really washed out, as indicated by price/volume action or sentiment. 2. The amount the indices gave back last Thurs and Fri. after the Wed. rally. I would prefer to see less retracement, which would be a subtle indication of underlying strength. 3. The distribution day last Friday. Volume upticked only slightly, but nonetheless I would prefer not to see a day like that in a nascent rally. 4. The follow through day was not as strong from a volume standpoint on the Nasdaq as at first glance. Normalize WCOM volume and you wind up with a 2 billion share day, not a 2.5 billion day. 5. Yesterday was a distribution day on the NYSE indices. While the volume uptick was not that large, and a giveback after such a large advance is to be expected, I would still prefer not to see that action. Also, volume on the Nasdaq, while lower than on Wed, was not as much lower as a quick glance might indicate (again, based on a normalization of WCOM volume over Tues and Wed). 6. Underperformance of the smaller cap indices. The large cap indices got way oversold, and could be expected to bounce. The smaller cap indices never got oversold, and so wouldn't benefit from an oversold bounce. IMO, we are witnessing a large cap bounce that is masking weakness in the markets that the smaller cap indices are revealing. Of course, individual stocks should be monitored based on their own activity (ex. CCRN). Eric - --------------------------------- Do You Yahoo!? LAUNCH - Your Yahoo! Music Experience - --0-937196825-1021580900=:60028 Content-Type: text/html; charset=us-ascii

A couple of points to note on the homebuilders (please note: I currently have no position in them, but am keeping a close eye on them as a short, so that's my bias):

1. The stocks have become a bit bifurcated. The weaker players in the industry have not been performing well (CTX, BZH, DHI, LEN etc), while the leaders have been doing well (RYL, NVR). I consider this to be an early sign of weakness, not strength, as the laggards have stopped performing.

2. HOV and WLS have clearly broken uptrend lines in the last week. KBH and NVR appear poised to do the same.

3. Vice Chairman of Toll Brothers, Bruce Toll, filed to sell 1 million of his 3 million shares. (For accuracies sake, in a press release he stated he has sold only 700k, and has no intention of selling the rest. Whatever.) . There was additional insider selling in CTX this morning as well. This goes hand in hand with all the other recent insider selling.

These stocks seem to be highly inversely correlated with strength in the economy (via interest rates).

I would be extremely careful if I was long these stocks right now. (I am, in fact, looking for short entry points. HOV on a bounce is probably a good entry point. Anyone have feedback/ ideas on entry points?)

ON M:

I am somwhat skeptical of this recent rally. Following up on my previous post on M, note the action on the Russell 2000 today (-1.2%), as well as IJS (-2%). I don't consider this definitive by any means, but I don't consider it bullish that the leading indices (small cap orientation) have continued their underperformance. In evaluating this recent rally off the lows, IMO there have been several yellow flags, including: 1. The markets never really washed out, as indicated by price/volume action or sentiment. 2. The amount the indices gave back last Thurs and Fri. after the Wed. rally. I would prefer to see less retracement, which would be a subtle indication of underlying strength. 3. The distribution day last Friday. Volume upticked only slightly, but nonetheless I would prefer not to see a day like that in a nascent rally. 4. The follow through day was not as strong from a volume standpoint on the Nasdaq as at first glance. Normalize WCOM volume and you wind up with a 2 billion share day, not a 2.5 billion day. 5. Yesterday was a distribution day on the NYSE indices. While the volume uptick was not that large, and a giveback after such a large advance is to be expected, I would still prefer not to see that action. Also, volume on the Nasdaq, while lower than on Wed, was not as much lower as a quick glance might indicate (again, based on a normalization of WCOM volume over Tues and Wed). 6. Underperformance of the smaller cap indices. The large cap indices got way oversold, and could be expected to bounce. The smaller cap indices never got oversold, and so wouldn't benefit from an oversold bounce. IMO, we are witnessing a large cap bounce that is masking weakness in the markets that the smaller cap indices are revealing.

Of course, individual stocks should be monitored based on their own activity (ex. CCRN).

Eric


Do You Yahoo!?
LAUNCH - Your Yahoo! Music Experience - --0-937196825-1021580900=:60028-- - - - -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: Thu, 16 May 2002 16:05:29 EDT From: Chazmoore@aol.com Subject: [CANSLIM] Help Needed - --part1_19d.25db067.2a156b09_boundary Content-Type: text/plain; charset="US-ASCII" Content-Transfer-Encoding: 7bit I am trying to understand the CANSLIM Evaluations tool. I pulled an evaluation on EXPE and compared it to the Daily Graph Chart and immediately became confused. CURRENT EARNINGS: EPS growth, according to the evaluator should be "at least 25% in the most recent quarter." The value is shown as -100% and the score is 0. However, EXPE reported March 31st earnings of .46 versus .08 for the same quarter a year ago (up 475%) and an increase from .31 to .46 (48%) March over December 2001. Latest three quarters of sales growth should be a minimum of 25%. The Evaluator shows 22%, and therefore no score. However, sales for September quarter were $79.5 Million, December quarter were 81.8 Million and March quarter were $116 Million, for a total of $277.3 Million. During the same three quarters last year, the total sales were $143.7 Million, for an increase of $133.6 Million or 92.9%. What am I doing wrong? Charley - --part1_19d.25db067.2a156b09_boundary Content-Type: text/html; charset="US-ASCII" Content-Transfer-Encoding: 7bit I am trying to understand the CANSLIM Evaluations tool.

I pulled an evaluation on EXPE and compared it to the Daily Graph Chart and immediately became confused.

CURRENT EARNINGS: EPS growth, according to the evaluator should be "at least 25% in the most recent quarter." The value is shown as -100% and the score is 0. However, EXPE reported March 31st earnings of .46 versus .08 for the same quarter a year ago (up 475%) and an increase from .31 to .46 (48%) March over December 2001.

Latest three quarters of sales growth should be a minimum of 25%. The Evaluator shows 22%, and therefore no score. However, sales for September quarter were $79.5 Million, December quarter were 81.8 Million and March quarter were $116 Million, for a total of $277.3 Million. During the same three quarters last year, the total sales were $143.7 Million, for an increase of $133.6 Million or 92.9%.

What am I doing wrong?

Charley - --part1_19d.25db067.2a156b09_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: Thu, 16 May 2002 11:18:55 -1000 From: "Mike Gibbons" Subject: RE: [CANSLIM] Help Needed This is a multi-part message in MIME format. - ------=_NextPart_000_0052_01C1FCCB.773C84A0 Content-Type: text/plain; charset="Windows-1252" Content-Transfer-Encoding: 7bit HI Chaz, As the tool author, I'll try to explain whats going on. I just ran it and got a divide by zero error. That means some data was missing and my code didn't trap it. In fact, yahoo.marketguide.com (Highlights report) shows the EPS growth rates as "NM" or not measured, so the data wasn't available to do the evaluation and EPS growth was reported as -100%. Normally, if data was not available, I report it in the evaluator as "NA". Clearly, I need to some more work to trap that situation in all possible cases. However, because the source of data for the evaluator is different from IBD's, there is always the possibility of inconsistent results. At the bottom of the evaluator is a link to the datasource wher you can always compare the data used in the evaluator to that available from IBD. Aloha, Mike Gibbons Proactive Technologies, LLC http://www.proactech.com -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Chazmoore@aol.com Sent: Thursday, May 16, 2002 10:05 AM To: canslim@lists.xmission.com Subject: [CANSLIM] Help Needed I am trying to understand the CANSLIM Evaluations tool. I pulled an evaluation on EXPE and compared it to the Daily Graph Chart and immediately became confused. CURRENT EARNINGS: EPS growth, according to the evaluator should be "at least 25% in the most recent quarter." The value is shown as -100% and the score is 0. However, EXPE reported March 31st earnings of .46 versus .08 for the same quarter a year ago (up 475%) and an increase from .31 to .46 (48%) March over December 2001. Latest three quarters of sales growth should be a minimum of 25%. The Evaluator shows 22%, and therefore no score. However, sales for September quarter were $79.5 Million, December quarter were 81.8 Million and March quarter were $116 Million, for a total of $277.3 Million. During the same three quarters last year, the total sales were $143.7 Million, for an increase of $133.6 Million or 92.9%. What am I doing wrong? Charley - ------=_NextPart_000_0052_01C1FCCB.773C84A0 Content-Type: text/html; charset="Windows-1252" Content-Transfer-Encoding: quoted-printable
HI=20 Chaz,
 
As the=20 tool author, I'll try to explain whats going on. I just ran it and got a = divide=20 by zero error. That means some data was missing  and my code didn't = trap=20 it. In fact, yahoo.marketguide.com (Highlights report) shows the EPS = growth=20 rates as "NM" or not measured, so the data wasn't available to do the = evaluation=20 and EPS growth was reported as -100%.
 
Normally, if data was not available, I report it in the = evaluator as=20 "NA". Clearly, I need to some more work to trap that situation in all = possible=20 cases.
 
However, because the source of data for the evaluator is = different from=20 IBD's, there is always the possibility of inconsistent results. At the = bottom of=20 the evaluator is a link to the datasource wher you can always compare = the data=20 used in the evaluator to that available from IBD.
 
Aloha,
 
Mike Gibbons
Proactive Technologies, = LLC
http://www.proactech.com
-----Original Message-----
From:=20 owner-canslim@lists.xmission.com=20 [mailto:owner-canslim@lists.xmission.com]On Behalf Of=20 Chazmoore@aol.com
Sent: Thursday, May 16, 2002 10:05=20 AM
To: canslim@lists.xmission.com
Subject: = [CANSLIM] Help=20 Needed

I am trying=20 to understand the CANSLIM Evaluations tool.

I pulled an = evaluation on=20 EXPE and compared it to the Daily Graph Chart and immediately became = confused.=20

CURRENT EARNINGS: EPS growth, according to the evaluator = should be "at=20 least 25% in the most recent quarter." The value is shown as -100% and = the=20 score is 0. However, EXPE reported March 31st earnings of .46 versus = .08 for=20 the same quarter a year ago (up 475%) and an increase from .31 to .46 = (48%)=20 March over December 2001.

Latest three quarters of sales = growth should=20 be a minimum of 25%. The Evaluator shows 22%, and therefore no score. = However,=20 sales for September quarter were $79.5 Million, December quarter were = 81.8=20 Million and March quarter were $116 Million, for a total of $277.3 = Million.=20 During the same three quarters last year, the total sales were $143.7 = Million,=20 for an increase of $133.6 Million or 92.9%.

What am I doing = wrong?=20

Charley
- ------=_NextPart_000_0052_01C1FCCB.773C84A0-- - - - -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 #2425 ****************************** 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.