From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #761 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 Sunday, December 5 1999 Volume 02 : Number 761 In this issue: Re: [CANSLIM] Stock Candidiates Re: [CANSLIM] Non CANSLIM - Employment Report - For Economics Majors only RE: [CANSLIM] Stock Candidiates [CANSLIM] Earl's Watch List Re: [CANSLIM] The Andreas reversal (non-Canslim) [CANSLIM]Industry group rankings Re: [CANSLIM] Stock Candidiates Re: [CANSLIM]Industry group rankings RE: [CANSLIM] Stock Candidiates [CANSLIM] LLUR and Archive Search Re: [CANSLIM] PEG Ratio Re: [CANSLIM] Non CANSLIM - Employment Report - For Economics Majors only Re: [CANSLIM] LLUR and Archive Search [CANSLIM] Canslim group rankings Re: [CANSLIM]Industry group rankings [CANSLIM] MTA Re: [CANSLIM] MTA [CANSLIM] Portfolio Tracking [CANSLIM] DGO List Re: [CANSLIM] LLUR ---------------------------------------------------------------------- Date: Sat, 4 Dec 1999 11:05:01 -0600 From: "Randy Harmelink" Subject: Re: [CANSLIM] Stock Candidiates > Payback period (price divided by (earnings times 1 year PEG)) < 1 A 1-year PEG, as typically defined, is a meaningless number. That's because both the P/E ratio and the growth rate have the same denominator, the latest 12-month earnings. When you factor that out of the numerator and the denominator of the PEG ratio, you end up with simply price divided by change in earnings over the next 12 months. That means it doesn't matter whether a $10 stock is changing in earnings from $1 to $2 or $5 to $6. Or even $100 to $101. All three situations will have the same 1-year PEG value. Which stock would you rather own for $10? I'll take the one that is expected to earn $101 next year, even if that growth rate is abysmal. In the 8/23/97 issue of Barron's, a PEG study was discussed. It based the PEG on the P/E of the 12-month forecasted earnings and the forecasted 5-year growth rate. For the 11 years the study covered, the 1000-stock universe returned 14.9% annually compared to the best 100 returning 21.7% annually and the worst 100 returning only 4.3% annually. The groups were rebalanced monthly. The best 100 averaged a PEG of 0.7 while the worst 100 averaged a PEG of 3.8. - - ------------------------------ Date: Sat, 04 Dec 1999 13:45:12 -0500 From: Craig Griffin Subject: Re: [CANSLIM] Non CANSLIM - Employment Report - For Economics Majors only There are a lot more Hispanics in Raleigh/Durham than there were 5 years ago. Used to be rare on construction sites, fast food restaurants, etc. Now they are commonplace (and often the only ones working on weekends). Many or most speak nearly no English. I suspect quite a few are illegals. How they would show up in labor stats is unknown to me. Not a very large sample here to use Raleigh/Durham only. But in Miami, you probably would not notice since there is a largely Hispanic population there anyway. Speaking of Hispanics, take a look at UVN. Nice chart. At 11:19 AM 12/4/99 -0500, you wrote: >I noted a disturbing statistical fact in one of the reports >emailed to me weekly, as follows: > >Specifically, if one averages nonfarm payrolls, >to smooth out the month-to-month fluctuations, >the "trend" is not good. For instance, >average monthly gains for each quarter this >year are as follows: > >First Quarter 209,000 >Second Quarter 210,000 >Third Quarter 201,667 > >October/November 248,500 > >This led to a further question in my mind: How can we add a >qtr million jobs (more or less) every month and still remain >at the same "hard core" unemployment rate of the low 4%?? >Conclusion: there must be a fresh infusion of labor into the >labor pool, such as college graduates (some do finish in Dec >rather than May/June) as well as high school >graduates/dropouts. Admittedly, there could also be a sig nr >of retirees finding out that Social Security isn't all its >cracked up to be, and taking part or full time employment. I >have seen no indication that this very important Labor >Report is accounting for any fresh infusion of workers. >Anyone have any source for this, or further ideas on >accounting/anticipating for it? > >Tom Worley >stkguru@netside.net >chat with me at ICQ # 5568838 >get ICQ software at http://www.icq.com/icqhomepage.html > > > >- - - ------------------------------ Date: Sat, 4 Dec 1999 11:46:39 -0700 From: "Dan Sutton" Subject: RE: [CANSLIM] Stock Candidiates Randy, I do not disagree that the 1 year PEG, or actually any SINGLE indicator is not the best guide to use ..if it is the ONLY criteria being applied before purchasing a stock. I would challenge anyone, anywhere to show us one indicator that is best. I would never use the cashflow per share ratio, PE ratio, payback ratio, PEG, Sales per Share or any other single criteria to make a purchase decision. I use the payback ratio simply as a method to rank candidates after a primary screen has been applied, I NEVER purchase stocks based on a statistical screen. After identifying prospective candidates I simply load it into a watch file and wait for a technical trigger to tell me to buy it. I have had tremendous luck this year using this approach. I will post some actual examples tomorrow, have to get ready for the office party tonight. - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com] On Behalf Of Randy Harmelink Sent: Saturday, December 04, 1999 10:05 AM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] Stock Candidiates > Payback period (price divided by (earnings times 1 year PEG)) < 1 A 1-year PEG, as typically defined, is a meaningless number. That's because both the P/E ratio and the growth rate have the same denominator, the latest 12-month earnings. When you factor that out of the numerator and the denominator of the PEG ratio, you end up with simply price divided by change in earnings over the next 12 months. That means it doesn't matter whether a $10 stock is changing in earnings from $1 to $2 or $5 to $6. Or even $100 to $101. All three situations will have the same 1-year PEG value. Which stock would you rather own for $10? I'll take the one that is expected to earn $101 next year, even if that growth rate is abysmal. In the 8/23/97 issue of Barron's, a PEG study was discussed. It based the PEG on the P/E of the 12-month forecasted earnings and the forecasted 5-year growth rate. For the 11 years the study covered, the 1000-stock universe returned 14.9% annually compared to the best 100 returning 21.7% annually and the worst 100 returning only 4.3% annually. The groups were rebalanced monthly. The best 100 averaged a PEG of 0.7 while the worst 100 averaged a PEG of 3.8. - - - - ------------------------------ Date: Sat, 04 Dec 1999 11:52:42 -0700 From: Earl Setser Subject: [CANSLIM] Earl's Watch List This weeks review was interesting. I expected to see the same behavior as last week, with almost all stocks hitting new highs during the week. Surprisingly, I found numerous stocks that are starting new bases. Most of these stocks have moved higher with the market, but are now working 2-3 weeks of consolidation. I limit my list to 4 weeks of basing, so most don't make the cut this week. However, it looks like there may be good opportunities coming up. (If you are really impatient, JDSU is working a 5 day correction and SEBL is in a 2 week base.) I did find several stocks that meet my screen with 4 or 5 week bases that may be poised to break out. All stocks are from Friday's (today's) weekend update (85/85 or better), A/B/B or better ratings, and A-C sponsorship rating. Do your own homework, and enjoy. (Disclaimer: I currently own PMCS) ADIC - 5 week base CPRT - Just broke out FDS - 5 week base HCT - 4 week base MCHP - Just broke out PRCN - 4 week base RMDY - 4 week base SCSC - 4 week base "Second Chance List" - The following are all stocks that have broken out, but look to be in a range that might enable an entry within 5% of the pivot point if you watch closely. ALTR BELFA LLTC PMCS ZOMX And finally, here are two stocks that I am following that don't quite pass the screen, but might be worth a look anyway. KRON - 4 1/2 month base, working handle? USWB - Broke out on low volume Friday - - ------------------------------ Date: Sat, 04 Dec 1999 19:14:59 +0100 From: Johan Van Houtven Subject: Re: [CANSLIM] The Andreas reversal (non-Canslim) >Sometimes my 5-year old sits on my lap while I scroll >through charts. When he sees a chart that is trending >upward, he says the chart is good. Sometimes it is just >that simple! ;-) > >Congratulations, Johan ! Thank you, Walter, both for the wishes and nice story. My 6 year old son Lucas sometimes sits on my lap when I'm watching real time quotes. He likes to write down the movements of the Dow in function of the time. He has learned that some stocks sometimes move in the same way as the Dow intraday. When he walks past my computer, and glances at the quote screen, he can say whether or not it is a good day in the markets . It's always a joy to hear him comment of the state of the market. :) - -- Johan - - ------------------------------ Date: Sat, 4 Dec 1999 13:01:14 -0500 (EST) From: chris dempsey Subject: [CANSLIM]Industry group rankings The following are the industry group rankings from the first (ex. 12/99) and 16th (11i/99) of each month in 1999. Documenting these numbers have greatly increased my portfolio performance. I was not capable of seeing a trend with today's number and one other number from 3 or 6 months ago. Each half month I go through the numbers and decide which groups I will focus on. For the first half of December I will be focusing on the following rankings from December 1, 1999 IBD: 1,2,3,4,5,6,7,9,10,11,13,14,16,19,20,21,22,24,25,26,29,31,33,34,40,41,42,51,54,63,65,66,68,70,72,82 Ranking 11 almost got the boot. I will give it another chance. I will attempt to own 20 positions from the above industry groups. I will sell anything that is not in one of the above groups. I hope this is helpful to someone. Does anyone else use anything that is slightly different from the book or newspaper that you feel is improving your portfolio results? I would like to hear it. IndustryGroup,12/99,11i/99,11/99,10i/99,10/99,9i/99,9/99,8i/99,8/99,7i/99,7/99,6i/99,6/99,5i/99,5/99,4i/99,4/99,3i/99,3/99,2i/99,2/99,1i/99,1/99 Internet-Software,1,1,1,6,17,29,48,40,30,43,46,39,5,4,3,3,2,2,23,4,52,1,1 Computer-Local Networks,2,2,2,1,1,2,3,3,1,1,2,16,14,11,14,11,17,14,8,10,7,5,5 Computer Softwr-Enterpse,3,4,3,2,6,15,23,28,28,22,26,62,64,59,51,45,38,37,20,19,16,14,8 Internet-Ntwk Sec/Sltns,4,3,4,11,43,16,18,15,98,32,43,77,12,6,4,4,4,4,3,2,2,1,1 Computer Softwr-Security,5,8,11,29,112,96,135,121,186,191,183,131,107,109,53,23,10,8,10,15,15,16,20 Telecommunctns-Cellulr,6,5,5,3,5,9,7,13,9,13,14,10,11,12,15,16,14,17,21,22,26,41,88 Telecommunications-Equip,7,6,6,5,4,3,4,5,4,3,6,6,6,9,10,12,21,21,22,23,23,20,23 Computer Softwre-Desktop,8,9,10,8,3,5,17,66,13,10,24,24,18,14,9,8,8,13,9,6,8,9,14 Elec-Misc Componets,9,10,12,10,10,10,9,8,7,8,10,13,20,19,25,18,9,10,6,7,11,8,6 Internet-ISP/Content,10,13,73,141,194,182,162,163,163,65,48,53,7,2,2,2,1,1,1,3,3,1,1 Elec-Semiconductor Mfg,11,7,7,4,2,1,1,1,3,4,3,4,10,10,13,13,12,11,13,11,6,4,2 Computer-Memory Devices,12,11,9,9,13,8,13,12,14,34,36,113,86,71,64,50,49,25,17,17,5,2,3 Computer Softw-Educ/Entr,13,14,15,16,18,21,29,50,46,87,91,120,75,57,37,25,33,34,29,37,37,35,27 Computer-Services,14,20,29,39,56,77,84,110,118,119,113,129,77,77,76,53,46,46,31,26,29,18,21 Computer-Peripheral Eq,15,15,14,13,19,14,15,24,11,7,8,8,15,30,28,39,39,39,27,25,20,25,24 Elec-Scientific Instrumn,16,19,24,23,26,39,49,34,40,17,20,26,31,44,48,57,70,57,57,54,36,40,51 Elec-Semiconductor Equip,17,12,8,12,14,19,26,44,50,35,21,48,68,48,52,33,13,6,7,5,4,3,4 Medical-Biomed/Genetics,18,17,13,7,7,6,8,6,18,36,38,46,33,35,32,27,18,15,12,13,12,12,13 Computer-Optical Recogtn,19,16,23,32,44,40,59,102,137,145,160,169,188,183,187,189,194,166,146,132,89,80,95 Retail/Whlsle-Cmptr/Cell,20,24,38,45,69,56,32,67,109,142,162,119,152,85,67,65,63,83,54,40,19,7,7 Electrical-Connectors,21,29,36,47,41,46,80,63,62,103,123,147,154,158,170,116,120,104,94,82,63,49,37 Comml Svcs-Advertising,22,21,40,63,106,126,96,100,110,85,99,89,79,54,43,37,36,41,53,56,42,42,59 Elec Products-Misc,23,18,17,15,22,25,20,17,20,9,9,9,16,16,22,24,35,48,36,51,32,51,47 Internet-E Commerce,24,38,132,148,174,142,129,162,148,90,51,32,1,1,1,1,3,3,2,1,1,1,1 Telecommunications-Svcs,25,22,41,64,60,57,52,42,22,18,18,17,9,8,7,9,16,16,16,21,21,30,31 Computer-Integrated Syst,26,41,37,36,25,22,19,37,74,76,82,95,94,127,126,130,103,125,68,63,39,27,32 Media-Radio/TV,27,26,19,35,23,23,24,25,25,27,35,25,22,17,20,19,28,36,44,48,56,52,54 Computer-Manufacturers,28,31,32,21,35,17,30,36,67,40,42,63,41,29,50,55,42,33,33,20,17,13,10 Medical-Ethical Drugs,29,30,27,24,31,50,99,138,134,140,131,130,134,141,143,102,79,63,66,50,49,33,38 Consumer Products-Misc,30,23,16,18,29,31,21,32,29,49,67,94,135,124,95,69,67,69,85,113,90,124,101 Computer Software-Fin,31,39,50,71,99,69,62,61,60,30,52,42,28,24,17,14,25,38,39,39,24,37,40 Retail-Consumer Elect,32,27,26,17,38,35,25,14,5,5,5,14,27,13,11,10,6,7,4,12,14,10,17 Houshold-Audio/Video,33,35,43,48,66,61,42,30,23,42,66,82,87,87,80,97,87,102,141,98,127,154,162 Utility-Telephone,34,36,34,51,92,118,82,79,78,62,62,72,101,39,44,44,52,53,55,38,54,69,81 Media-Cable TV,35,34,28,28,36,37,43,38,19,6,4,2,2,7,8,7,11,12,11,9,9,15,15 Medical-Products,36,37,25,19,16,24,22,55,43,26,57,61,65,70,65,56,40,22,19,18,18,19,12 Medical-Instruments,37,25,20,14,15,20,51,62,55,80,120,114,84,94,102,98,75,64,50,33,35,44,29 Utility-Water Supply,38,28,21,34,46,33,37,77,97,111,119,133,151,171,161,148,126,128,134,83,59,34,42 Retail-Mail Order&Direct,39,44,18,27,37,53,86,127,141,147,159,47,35,26,23,26,45,31,18,16,13,6,9 Comml Services-Misc,40,33,35,37,59,58,64,83,57,58,74,64,43,41,38,28,31,32,24,27,22,17,26 Computer-Graphics,41,51,89,79,120,119,146,181,167,139,102,126,130,129,73,48,30,19,77,80,67,59,61 Elec-Military Systems,42,46,53,56,62,75,68,85,107,55,75,86,70,90,90,78,82,84,78,61,61,60,70 Retail/Wholesale-Jewelry,43,56,60,46,51,48,53,57,35,21,28,23,25,18,16,21,20,26,46,52,71,76,114 Energy-Other,44,32,22,22,8,12,14,16,12,14,25,37,52,75,86,104,156,129,123,141,147,120,159 Elec-Parts Distributors,45,42,30,20,9,7,11,20,44,71,141,162,174,193,194,192,187,180,194,195,184,173,78 Elec-Laser Sys/Component,46,40,47,41,39,27,12,4,2,2,1,1,4,5,5,6,5,5,5,8,10,11,22 Oil&Gas-Intl Specialty,47,45,77,66,64,52,39,35,33,33,55,66,112,102,87,151,147,172,186,182,189,188,184 Utility-Gas Distribution,48,43,39,38,50,51,71,54,63,107,111,141,144,166,173,179,173,165,121,131,113,78,85 Metal Ores-Gold/Silver,49,58,65,40,28,110,100,111,127,179,130,143,180,108,69,139,169,66,26,29,72,55,84 Finance-Publ Inv Fd-Frn,50,59,78,105,107,98,73,78,72,52,44,55,83,51,58,66,60,77,93,127,144,146,150 Finance-Consumr/Comml,51,66,64,112,78,82,90,89,49,54,93,67,49,28,24,42,41,47,64,102,125,115,139 Leisure-Gaming,52,54,33,30,21,30,33,21,24,29,15,12,23,25,26,36,50,60,58,66,106,87,161 Elec Measrng Instruments,53,55,31,26,24,26,31,26,27,31,37,49,57,79,71,40,55,54,45,60,66,84,57 Retail-Major Disc Chains,54,67,111,128,181,191,185,166,165,114,126,112,78,43,31,31,19,23,35,43,40,63,52 Metal Proc & Fabrication,55,63,69,52,33,28,28,29,41,53,39,28,61,73,83,111,152,167,157,184,180,165,179 Financial Services-Misc,56,57,122,138,134,160,119,101,99,79,87,38,26,21,21,22,23,29,32,34,45,50,66 Leisure-Toys/Games/Hobby,57,50,44,81,74,93,56,155,145,98,71,21,24,27,42,41,58,74,65,72,70,129,103 Machinery-Farm,58,60,49,59,52,49,40,48,64,73,54,34,40,49,75,91,117,163,159,185,183,193,193 Finance-Pub Trd Inv Fd-Eqt,59,61,88,99,139,147,144,141,143,153,154,152,138,135,117,107,107,99,90,91,82,97,104 Oil & Gas-Drilling,60,48,74,31,11,4,2,2,6,11,7,5,17,60,77,105,84,181,192,193,197,196,197 Banks-West/Southwest,61,52,42,55,68,105,108,112,104,127,132,157,143,160,182,177,167,171,174,174,173,134,136 Comml Svcs-Security/Sfty,62,64,62,68,89,90,111,51,56,38,68,117,119,140,108,100,118,95,71,69,51,54,50 Finance-Investment Mgmt,63,98,120,132,147,141,159,131,129,126,107,145,98,69,136,143,89,65,117,136,169,153,164 Electrical-Equipment,64,53,46,43,49,47,45,43,38,39,41,45,69,96,92,96,78,89,131,139,121,109,134 Leisure-Movies & Related,65,62,92,82,109,72,65,92,66,93,122,60,66,58,66,68,99,73,82,93,95,106,62 Transport-Air Freight,66,138,154,157,118,133,172,137,171,120,134,109,37,32,27,35,34,27,28,41,38,104,60 Medical-Drug/Diversified,67,47,63,92,145,143,145,165,172,154,172,167,155,146,123,123,88,92,120,92,81,107,64 Soap & Clng Preparatns,68,68,107,131,160,156,171,167,181,170,182,183,168,177,138,136,74,51,103,88,108,103,79 Metal Ores-Misc,69,82,112,70,45,66,77,70,84,91,56,58,80,67,60,114,116,96,69,71,131,137,156 Comml Serv-Staffing,70,70,85,83,102,115,133,129,147,161,100,110,127,157,181,171,158,186,148,171,164,174,172 Steel-Producers,71,84,84,88,48,32,34,46,71,83,76,35,47,47,49,76,132,106,70,76,116,142,186 Insurance-Life,72,77,100,130,143,157,143,118,123,128,158,179,185,182,151,156,129,141,145,157,130,114,82 Leisure-Services,73,119,87,136,119,94,105,64,81,81,61,65,51,42,35,32,27,44,37,62,64,72,83 Electrical-Control Instr,74,141,117,104,61,62,57,59,61,89,97,71,92,88,116,99,133,116,122,129,140,145,135 Mining - -Gems,75,88,59,50,40,54,36,18,21,37,27,41,62,89,111,138,137,139,102,165,166,159,191 Comml-Leasing Cos,76,91,108,113,108,114,103,120,102,124,127,125,115,111,104,95,124,156,153,162,162,180,153 Transportation-Svcs,77,87,55,69,55,64,61,65,87,64,69,54,42,37,55,59,44,40,59,68,100,90,111 Retail-Apparel/Shoe,78,69,66,65,86,88,137,104,94,56,53,30,32,22,18,20,15,18,25,28,27,29,34 Computer Software-Med,79,154,110,58,63,55,60,88,89,25,31,40,13,68,105,128,125,115,30,24,30,24,35 Finance-Investment Bkrs,80,132,158,174,123,132,87,73,42,24,30,7,3,3,6,5,7,9,14,14,41,28,28 Banks-Midwest,81,76,72,95,114,121,117,128,113,133,152,175,175,181,174,167,159,157,163,163,157,125,119 Retail/Whlse Office Supl,82,109,82,156,152,183,184,180,162,167,176,188,184,174,140,125,112,87,76,116,112,62,48 Beverages-Alcoholic,83,78,98,110,129,130,128,145,161,155,173,158,171,161,147,157,100,67,62,35,46,39,53 Medical/Dental-Supplies,84,75,57,67,79,111,113,107,126,137,136,134,125,131,130,127,91,71,73, 67,76,64,49 Retail-Discount&Variety,85,89,67,73,53,106,118,99,45,66,78,85,109,110,145,79,104,108,63,124,103,71,55 Chemicals-Basic,86,128,140,133,94,95,76,52,70,72,49,29,74,55,74,115,142,142,156,164,181,170,181 Paper & Paper Products,87,107,109,80,47,45,38,31,36,41,34,19,45,33,34,62,81,91,95,89,85,70,113 Food-Misc Preparation,88,85,70,93,131,127,134,142,155,173,171,185,178,187,190,184,163,134,114,87,97,98,99 Medical/Dental/Serv,89,73,54,98,117,104,94,87,90,74,64,69,67,78,103,83,73,61,47,44,44,57,63 Aerospace/Defense Eqp,90,105,129,96,121,84,102,117,96,77,106,93,110,122,79,63,64,70,84,105,102,118,106 Retail-Super/Mini Mkts,91,92,71,60,73,60,66,116,79,105,142,142,147,162,168,135,119,85,96,85,62,56,45 Diversified Operations,92,111,156,111,110,109,115,106,106,115,112,100,111,81,100,86,93,93,108,109,110,100,91 Oil&Gas-U S Explo&Prod,93,65,45,33,20,13,6,7,10,12,12,20,55,130,120,161,178,194,189,183,191,189,190 Bldg-Constr Prods/Misc,94,115,114,90,80,79,75,69,76,82,86,106,93,93,82,81,96,101,100,90,86,110,108 Utility-Electric Power,95,99,75,102,127,134,141,143,146,158,157,168,165,169,169,176,175,160,154,120,88,65,75 Insurance-Brokers,96,94,83,122,116,122,123,114,108,78,89,87,90,112,93,88,122,113,52,73,68,92,65 Finance-Savings & Loan,97,108,97,109,126,136,131,136,132,157,147,159,159,153,148,154,141,127,139,152,151,147,145 Retail/Whlsle-Bldg Prods,98,74,106,134,149,167,174,135,128,141,163,149,149,138,139,77,54,52,60,78,65,86,89 Machinery-Gen Industrial,99,140,147,150,104,81,88,105,115,125,121,74,72,95,81,101,80,97,99,96,119,136,127 Oil&Gas-Field Services,100,100,152,77,34,18,10,9,16,28,22,22,34,72,84,112,92,168,177,189,193,194,194 ______________________________________________ FREE Personalized Email at Mail.com Sign up at http://www.mail.com?sr=mc.mk.mcm.tag001 - - ------------------------------ Date: Sat, 4 Dec 1999 14:44:08 -0600 From: "Randy Harmelink" Subject: Re: [CANSLIM] Stock Candidiates Dan, I'd be interested to see the examples, especially the Payback ratio numbers. Because mathematically, the calculation doesn't make sense to me. In any case, the point I was making is that the 1-year PEG ratio factors out simply to price divided by projected change in earnings. I absolutely see no value in that number as an indicator, as per my previous examples. Because the indicator loses the context of the actual earnings. By dividing price by (earnings * PEG) to get the payback ratio, price would cancel itself out of both denominator and numerator, leaving simply projected change in earnings divided by earnings -- which is the growth rate itself. So, obviously, I'm not understanding the calculation. I doubt you are selecting stocks by putting a ceiling on the growth rate...? For example, if: Price = $10 Earnings = $1 Projected earnings next year = $2 Then: P/E = $10 / $1 = 10 Growth rate = ($2- $1) / $1 = 1.0 (or 100%) PEG = 10 / 100% = 0.1 Payback ratio = $10 / ($1 * 0.1) = 100 ???? My assumption is that if you are getting a valid indicator back by using 1-year PEG, it's in spite of using the 1-year PEG, not because of it. You'd be better off ignoring the PEG number altogether. Randy - - ------------------------------ Date: Sat, 4 Dec 1999 17:40:58 -0500 From: "james sullivan" Subject: Re: [CANSLIM]Industry group rankings >The following are the industry group rankings from the first (ex. 12/99) and >16th (11i/99) of each month in 1999 Chris, That was excellent!! Thank you for all that effort! Jim - - ------------------------------ Date: Sat, 4 Dec 1999 15:42:34 -0800 From: "mikelu" Subject: RE: [CANSLIM] Stock Candidiates You quoted: "The best 100 averaged a PEG of 0.7 while the worst 100 averaged a PEG of 3.8." I'm not sure how they determined this, but it seems to be saying to buy stocks with PEG < 1. I thought you were saying PEG using historical numbers doesn't make sense, but PEG using estimated numbers is good. I guess I misunderstood you. I believe the idea behind using PEG is that it is the approximate PE when the stock is fairly valued. So, you can tell you whether a stock is under-, fairly-, or over-valued, by whether PEG is <1, 1, or >1. David Ryan (previously affiliated with WON) said he would avoid stocks whose PE > 2*PE(S&P 500). Mike - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Randy Harmelink Sent: Saturday, December 04, 1999 12:44 PM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] Stock Candidiates Dan, I'd be interested to see the examples, especially the Payback ratio numbers. Because mathematically, the calculation doesn't make sense to me. In any case, the point I was making is that the 1-year PEG ratio factors out simply to price divided by projected change in earnings. I absolutely see no value in that number as an indicator, as per my previous examples. Because the indicator loses the context of the actual earnings. By dividing price by (earnings * PEG) to get the payback ratio, price would cancel itself out of both denominator and numerator, leaving simply projected change in earnings divided by earnings -- which is the growth rate itself. So, obviously, I'm not understanding the calculation. I doubt you are selecting stocks by putting a ceiling on the growth rate...? For example, if: Price = $10 Earnings = $1 Projected earnings next year = $2 Then: P/E = $10 / $1 = 10 Growth rate = ($2- $1) / $1 = 1.0 (or 100%) PEG = 10 / 100% = 0.1 Payback ratio = $10 / ($1 * 0.1) = 100 ???? My assumption is that if you are getting a valid indicator back by using 1-year PEG, it's in spite of using the 1-year PEG, not because of it. You'd be better off ignoring the PEG number altogether. Randy - - - - ------------------------------ Date: Sat, 04 Dec 1999 17:41:13 PST From: "Harry Yang" Subject: [CANSLIM] LLUR and Archive Search Hi there, I tried to search in this mailing list's archive by using http://www.xmission.com/~mcjathan/canslim/search.html However, after I click submit, it always gave me a page of perl script. Could anyone here tell me how to search in the old archive? Also, could you let me know what does LLUR chart mean? Is it a good pattern or bad one? Thanks. Harry ______________________________________________________ Get Your Private, Free Email at http://www.hotmail.com - - ------------------------------ Date: Sat, 4 Dec 1999 20:25:27 -0600 From: "Randy Harmelink" Subject: Re: [CANSLIM] PEG Ratio Mike, You are correct -- the theory is that a low PEG is good, high PEG is bad. The only PEG calculation I'm claiming is bad is the 1-year PEG, because mathematically it can be reduced to a meaningless ratio (current stock price versus change in earnings). The 2-year PEG and 5-year PEG calculations don't reduce in the same way, nor does the PEG based on a next year projected P/E relative to the 5-year growth estimate. I've only seen the results of a study on the last situation, not any of the others. For most stocks, David Ryan's advice is probably sound. But if a stock is expected to grow at 200% or 300% per year versus a 15% or 30% expectation for the S&P 500, especially for a period of several years, I think it's a rule of thumb that can be temporarily dismissed. But such glowing expectations without a relative cost must usually be suspect -- TANSTAAFL! Actually, the PEG ratio is an attempt to quantify the relationship between current value and future value, since P/E just reflects historical value unless the earnings are flat and stable (not a CANSLIM attribute!). A projected P/E would be another way to express future value. Another way would be to compare the current price to the present value of all projected earnings. As Dan wrote, "any SINGLE indicator is not the best guide to use...". Each has their limitations. It helps to know their strengths and weaknesses. That's why I spoke up about the 1-year PEG. Randy - ----- Original Message ----- From: mikelu To: Sent: Saturday, December 04, 1999 5:42 PM Subject: RE: [CANSLIM] Stock Candidiates > You quoted: "The best 100 averaged a PEG of 0.7 while the worst 100 averaged > a PEG of 3.8." > > I'm not sure how they determined this, but it seems to be saying to buy > stocks with PEG < 1. I thought you were saying PEG using historical numbers > doesn't make sense, but PEG using estimated numbers is good. I guess I > misunderstood you. > > I believe the idea behind using PEG is that it is the approximate PE when > the stock is fairly valued. So, you can tell you whether a stock is under-, > fairly-, or over-valued, by whether PEG is <1, 1, or >1. > > David Ryan (previously affiliated with WON) said he would avoid stocks whose > PE > 2*PE(S&P 500). > > Mike - - ------------------------------ Date: Sat, 04 Dec 1999 22:22:20 -0500 From: Al French Subject: Re: [CANSLIM] Non CANSLIM - Employment Report - For Economics Majors only Employment and unemployment are two different measures. Employment counts the number of people on payrolls. Unemployment counts those seeking work, including those simply between jobs, which amounts to somewhere between 2.5 to 4 percent. Persons unemployed but not seeking work are not counted in the unemployment numbers. It's quite possible for both measures to increase in the same period and vice versa. An increase in employment while unemployment remains level represents net job creation which implies a future increase in economic activity. The recent numbers were helped to a great extent by the Indian summer that has kept construction employment up. Bottom line: increased employment, level unemployment, and wage progression consistent with inflation is bullish--just like the market said Friday after the numbers were released. Al French Tom Worley wrote: > I noted a disturbing statistical fact in one of the reports > emailed to me weekly, as follows: > > Specifically, if one averages nonfarm payrolls, > to smooth out the month-to-month fluctuations, > the "trend" is not good. For instance, > average monthly gains for each quarter this > year are as follows: > > First Quarter 209,000 > Second Quarter 210,000 > Third Quarter 201,667 > > October/November 248,500 > > This led to a further question in my mind: How can we add a > qtr million jobs (more or less) every month and still remain > at the same "hard core" unemployment rate of the low 4%?? > Conclusion: there must be a fresh infusion of labor into the > labor pool, such as college graduates (some do finish in Dec > rather than May/June) as well as high school > graduates/dropouts. Admittedly, there could also be a sig nr > of retirees finding out that Social Security isn't all its > cracked up to be, and taking part or full time employment. I > have seen no indication that this very important Labor > Report is accounting for any fresh infusion of workers. > Anyone have any source for this, or further ideas on > accounting/anticipating for it? > > Tom Worley > stkguru@netside.net > chat with me at ICQ # 5568838 > get ICQ software at http://www.icq.com/icqhomepage.html > > - - - ------------------------------ Date: Sat, 04 Dec 1999 21:46:22 -0700 From: Earl Setser Subject: Re: [CANSLIM] LLUR and Archive Search LLUR is lower left/upper right, and refers to a stock that is consistently climbing. It's a great chart to own!!! However, I'm not clear on how you would time an entry into a stock with an LLUR. At 05:41 PM 12/4/99 PST, you wrote: >Hi there, > >I tried to search in this mailing list's archive by using >http://www.xmission.com/~mcjathan/canslim/search.html > >However, after I click submit, it always gave me a page of perl >script. Could anyone here tell me how to search in the old archive? > >Also, could you let me know what does LLUR chart mean? Is it a >good pattern or bad one? > >Thanks. > >Harry > > >______________________________________________________ >Get Your Private, Free Email at http://www.hotmail.com > >- > > > - - ------------------------------ Date: Sun, 5 Dec 1999 12:16:19 -0000 From: "Marc Laniado" Subject: [CANSLIM] Canslim group rankings I try and work out the gradient for change in group relative strength for 3 month, 1 month and 2 weeks. That allows you to find those groups moving up nicely. This is useful when groups undergo rotation, I think, during a continuous bull market. I also calculate the A/D averages for each group listed in DGO. I look to that for confirmation and sometimes changes faster than group RS. Sometimes, this has been exceptionally useful! - ----- Original Message ----- From: chris dempsey To: Sent: Saturday, December 04, 1999 6:01 PM Subject: [CANSLIM]Industry group rankings - - ------------------------------ Date: Sun, 5 Dec 1999 12:07:02 -0000 From: "Marc Laniado" Subject: Re: [CANSLIM]Industry group rankings I try and work out the gradient for change in group relative strength for 3 month, 1 month and 2 weeks. That allows you to find those groups moving up nicely. This is useful when groups undergo rotation, I think, during a continuous bull market. I also calculate the A/D averages for each group listed in DGO. I look to that for confirmation and sometimes changes faster than group RS. Sometimes, this has been exceptionally useful! - ----- Original Message ----- From: chris dempsey To: Sent: Saturday, December 04, 1999 6:01 PM Subject: [CANSLIM]Industry group rankings > Oil&Gas-Field > Services,100,100,152,77,34,18,10,9,16,28,22,22,34,72,84,112,92,168,177,189,1 93,194,194 > > ______________________________________________ > FREE Personalized Email at Mail.com > Sign up at http://www.mail.com?sr=mc.mk.mcm.tag001 > - - ------------------------------ Date: Sun, 05 Dec 1999 16:13:32 +0100 From: "Makara Tamás" Subject: [CANSLIM] MTA Hi everyone, this is my first message to the list although I 've been reading it for a while. I live and trade in Hungary. I have been influenced to a great extent by Lefevre's book and HTMMIS and have been trading for 8 years. I don't follow WON's rules rigorously, in fact it would be really difficult to do so in Hungary, as there ar far fewer stocks to chose from. Don't worry, I'm not going to bore you with details of the Hungarian market. MTA may break out of a huge base (look at a three-year chart) and a nice cup and handle in the coming days. MTA, listed on the NYSE, is THE Hungarian Telecom company, has an overwhelming market share in wire telecommunications and owns the country's leading mobile operator. Has huge growth potential in the mobile business and as internet service provider. The Hungarian mobile market shows astonishing growth - penetration is 20 percent of the population and is expected to reach 50% within two years. Ameritech and Deutsche Telekom both have 30 percent stake in the company. P/E approximately 20. Obviously not a true CS stock, eps rank and relative strength are not high enough. Volume. It may be difficult to judge whether volume is big enough if you look at NYSE volume alone, since the majority of trading takes place in London and Budapest. If anyone's interested, I'll send a message if there's really big volume in Budapest. Hungary has a fast growing, sound economy, is a member of NATO and is expected to join the Europen Union within three to four years. Tamas (this is my christian name, in Hungarian it comes after the family name) - - ------------------------------ Date: Sun, 5 Dec 1999 10:37:07 -0500 From: "Tom Worley" Subject: Re: [CANSLIM] MTA Hi Tamas, As I work for a global bank, I am always interested in the details of foreign markets, so feel free to "bore me" (via private email) with details of the Hungarian market system. Looking at the chart of MTA (Magyar Tavkozelesi - tough one to spell) the past four qtrs of earnings and sales do not suggest the growth you describe. Is there something that has changed to bring about this growth that is not yet being reflected in past qtrly results? I also noticed that the government is trying to restrict its rate increases. Is this going to succeed, and will it create a profitability problem for the company? Tom Worley stkguru@netside.net chat with me at ICQ # 5568838 get ICQ software at http://www.icq.com/icqhomepage.html - -----Original Message----- From: Makara Tam=E1s To: cs Date: Sunday, December 05, 1999 10:15 AM Subject: [CANSLIM] MTA Hi everyone, this is my first message to the list although I 've been reading it for a while. I live and trade in Hungary. I have been influenced to a great extent by Lefevre's book and HTMMIS and have been trading for 8 years. I don't follow WON's rules rigorously, in fact it would be really difficult to do so in Hungary, as there ar far fewer stocks to chose from. Don't worry, I'm not going to bore you with details of the Hungarian market. MTA may break out of a huge base (look at a three-year chart) and a nice cup and handle in the coming days. MTA, listed on the NYSE, is THE Hungarian Telecom company, has an overwhelming market share in wire telecommunications and owns the country's leading mobile operator. Has huge growth potential in the mobile business and as internet service provider. The Hungarian mobile market shows astonishing growth - penetration is 20 percent of the population and is expected to reach 50% within two years. Ameritech and Deutsche Telekom both have 30 percent stake in the company. P/E approximately 20. Obviously not a true CS stock, eps rank and relative strength are not high enough. Volume. It may be difficult to judge whether volume is big enough if you look at NYSE volume alone, since the majority of trading takes place in London and Budapest. If anyone's interested, I'll send a message if there's really big volume in Budapest. Hungary has a fast growing, sound economy, is a member of NATO and is expected to join the Europen Union within three to four years. Tamas (this is my christian name, in Hungarian it comes after the family name) - - - - ------------------------------ Date: Sun, 05 Dec 1999 09:08:39 -0700 From: Earl Setser Subject: [CANSLIM] Portfolio Tracking I've been using MSN Passport for portfolio tracking, but I haven't been able to get in for several days now. I'm looking for an alternate that will automatically take care of splits, dividends, MF distributions, etc. Suggestions? - - ------------------------------ Date: Sun, 5 Dec 1999 11:40:14 -0500 From: "Tom Worley" Subject: [CANSLIM] DGO List The overall list this week grew only slightly, from 183 to 193. In scrolling thru these stocks, I could not help but notice how so many would have doubled (or better) your investment had you bot them back in April or so and just held them, ignoring all the volatility in between. I was also looking without success for any evidence of the usual "tax related" selling pressure that occurs this time of year. Stocks at new highs are particularly vulnerable as they can be sold (to book the paper profit against losses already taken) and then immediately rebought. While I didn't notice any evidence yet of this selling pressure, I did notice that a lot of the stocks on this list were continuing to move up from very extended levels on less than ADV. For the new members, this list is culled from the DGO (Daily Graphs Online, a WON publication) list of stocks that are (1) in the DG books; (2) have both RS and EPS of 80 or better; and (3) were at or within 5% of their 12 month high during the prior week. Since this is a subscription service, I am not allowed to post the entire list, but I do scroll thru all the charts and post those that to my eye present a constructive chart suggesting they are worth further review, research or watching. In no way is this list intended as a "buy" or "hold" list. Terms: CUP & HANDLE - see HTMMIS BASE - see HTMMIS LLUR - for a chart showing "lower left, upper right" progression - not exactly CANSLIM but fits, the consistency of the slope becomes "the base" FUNNEL - like a cup, but steeper and briefer STAIRCASE - just like it seems Anyway, so much for the editorial comments, here's the list that I culled: Bases/Basing: QCOM, ADIC, TQNT (4 week base), INTI, RSYS, KEI, IINT, PSUN (long base), ISYS, CGN, LTRE, DTM, XLNX, OSI, JMED, GIC, GCO (basing on the 50DMA), TNL, WSM, GILTF, BBOX, INF, AFCI, BRCM (?), C, SBSE, APH, MTZ, ADPT, WIND, ACTL, CTR, ROG, TXN, DS, CA, LVMHY Breakouts/Breaking out (I define this category that on a glance at the chart shows a still buyable breakout in progress): PRGS, CA, GLW, LLTC, CVG Misc: COHR - trading range SDLI - second attempt to break out on low volume, something happening? Tom Worley stkguru@netside.net chat with me at ICQ # 5568838 get ICQ software at http://www.icq.com/icqhomepage.html - - ------------------------------ Date: 5 Dec 1999 09:42:55 -0800 From: "Tim Fisher" Subject: Re: [CANSLIM] LLUR By on any pullback to the 50DMA or whichever average it trades off of. The risk lies in the fact that it may be in a pattern breaking move so I check the news first. Pullbacks caused by downgrades because it reached a price target are golden. I also buy these if they breakout - since there is no base you'd be waiting a long time for a WON pattern to form. TIF is my all-time favorite LLUR. Tom's ADBE surprised me - I hand't seen it mentioned as a CANSLIM type stock before but I love the chart & the company. At 09:46 PM 12/4/99 -0700, you wrote: >LLUR is lower left/upper right, and refers to a stock that is consistently >climbing. It's a great chart to own!!! However, I'm not clear on how you >would time an entry into a stock with an LLUR. > >At 05:41 PM 12/4/99 PST, you wrote: > >Hi there, > > > >I tried to search in this mailing list's archive by using > >http://www.xmission.com/~mcjathan/canslim/search.html > > > >However, after I click submit, it always gave me a page of perl > >script. Could anyone here tell me how to search in the old archive? > > > >Also, could you let me know what does LLUR chart mean? Is it a > >good pattern or bad one? > > > >Thanks. > > > >Harry > > > > Tim Fisher, 1995 President, Pacific Fishery Biologists Ore-ROCK-On Rockhounding Web Site PFB Information mailto:tim@OreRockOn.com WWW http://OreRockOn.com - - ------------------------------ End of canslim-digest V2 #761 ***************************** 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.