From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #227 Reply-To: canslim Sender: owner-canslim-digest@lists.xmission.com Errors-To: owner-canslim-digest@lists.xmission.com Precedence: bulk X-No-Archive: yes canslim-digest Wednesday, May 6 1998 Volume 02 : Number 227 In this issue: Re: [CANSLIM] Re: "I" Re: [CANSLIM] Adds to my watch list Re: [CANSLIM] RCII at 52wk hi on light vol Re: [CANSLIM] Re: [CANSLIM] OBV/MF: Marginal stock RE: [CANSLIM] Re: "I" Re: [CANSLIM] Re: "I" Re: [CANSLIM] HIV Re: [CANSLIM] its been a longtime and maybe the last time [CANSLIM] MRE RE: [CANSLIM] Re: "I" ---------------------------------------------------------------------- Date: Wed, 6 May 1998 08:48:54 -0400 From: Larry Horn Subject: Re: [CANSLIM] Re: "I" I'm re-posting this because I forgot that I have to hit a return periodically so that all can read my posts. This discussion has been helpful. I have been using criteria for %Mgmt and %Instit that I got from a tape that came with my IBD subscription, "Investing to Win" an interview with David Ryan, which explains CANSLIM. On the tape, he says that %Mgmt is important because it shows that the company believes in what they are doing. He recommended that %Mgmt not be over 50% because then the co can act more like it's private. On the low end, he said that %Mgmt should be at least 15%. This is pretty restrictive and has been knocking out about a third to half of the cos in my first pass screen. I think I'll find better charts if I don't use this as an absolute criteria. Similarly with %Instit, he recommends "some institutional ownership, at least 1-2%" but it should usually be sold by the time it hits 30% when everyone knows about it. He said that when it's too high, it can make the stock riskier. Using this as an absolute criteria is very restrictive and knocks out the majority of cos in my screen. Again, I think I need to look at the charts before looking at both of these numbers. Isn't %mgmt just (shares outstanding-float)/shares outstanding??? The times I've checked different sources with different numbers they had different floats (if they were listed anyway). The data from I mentioned from the tape is from notes I took while listening to it. I hope it is accurate. Larry Horn - -----Original Message----- From: Tom Worley [SMTP:stkguru@netside.net] Sent: Tuesday, May 05, 1998 6:09 AM To: CANSLIM Subject: Re: [CANSLIM] Re: "I" Dan, go back and look at the original post. The "3%" is the ownership by management, the 18% is the funds percentage of the float and the 7% is the bank's percentage of the float. All per DGO. If you wanted to calculate the institutional holdings on MLHR, it would be .18 plus .07 times the float. Tom W - -----Original Message----- From: Dan Musicant To: canslim@lists.xmission.com Date: Tuesday, May 05, 1998 12:06 AM Subject: Re: [CANSLIM] Re: "I" :>DVI 27% ? ? not in the books :>MLHR 18% 3% 7% DGO shows MLHR at 18% owned by funds, 7% by banks. 18+7=3? Not last time I checked. Dan - - ------------------------------ Date: Wed, 06 May 1998 06:16:09 -0700 From: Tim Fisher Subject: Re: [CANSLIM] Adds to my watch list I was referring to the fact that Zacks still hadn't updated their database to include April, wasn't talking about DGO at all. Zacks charges for their database after a trial period - I have many friends so I have had many trials ;) Tom, you're not holding your picks up to the same standard to which you hold other posted picks to this list. I look forward to your picking apart others' picks, including mine, and finding the tiniest deviations from CANSLIM principles. Clearly your list includes three which fail more than one of the criteria, according to my (old) data. My portfolio closed up on a down day, but I'm not touting that - frankly I'm surprised that you would hold up one days' performance as proof of anything. And I guess that I am afraid of stocks which have 80% of the float controlled by management, since if they see bad things on the horizon they can sell en masse and drive the price down, albeit not as far as institutional selling would. And as you know, this provides for very poor liquidity, which is what is not wanted if you are looking for insitutions to buy into the stock and drive the price up. Where would you draw the line on insider holdings? 90%? 95%? At 12:02 AM 5/6/98 -0400, you wrote: >Sorry, Tim, but I am still not scared of a stock with strong >management ownership, and intend to continue to use DGO data instead >of Zack's. May not be perfect, but works better and more consistently >for me, and when I see an obvious problem in their data feed, at least >they will investigate and fix it, as well as respond on it. > >And despite a down day, all four of my new "picks" (KTIE, NEWH, RENG, >SNHY) closed up 1.29%, 1.73%, 4.17%, and 0.42% respectively, so guess >I am not going to change my "style" of picking just yet (and SNHY was >the lowest of the four in its gains). > >Tom W > >-----Original Message----- >From: Tim Fisher >To: canslim@lists.xmission.com >Date: Tuesday, May 05, 1998 9:50 AM >Subject: Re: [CANSLIM] Adds to my watch list > > >>Here's what I get from March data (Zacks still had March when I >looked on >>Sunday. Who would pay for that kind of service?). NEWH looks to be >>controlled by mgmt., and ignoring all the N/A's (Zacks data is >nothing if >>not sketchy!) I don't see much here, except maybe SNHY. >> Tim Fisher, 1995 President, Pacific Fishery Biologists Ore-ROCK-On Rockhounding Web Site PFB Information mailto:tim@OreRockOn.com WWW http://OreRockOn.com - - ------------------------------ Date: Wed, 06 May 1998 06:17:44 -0700 From: Tim Fisher Subject: Re: [CANSLIM] RCII at 52wk hi on light vol As failed to mention, it broke out Monday to a new 52-wk high on the earnings report on extreme volume, then tried to break that Tues., which would have been the second breakout day. I watched the intraday chart for an hour and decided it wasn't going to hold up, so I waited until lunch then watched it like a hawk. I did manage to get in, at 4:00:00 PM, with a nasty little limit order 1/8 below the bid - it sat on the table for a while and was executed at the bell. So I guess I was partly responsible for the -1/8 point performance yesterday (along with the no doubt 1000s of shares that my piddly little order was piggybacked onto). At 12:38 AM 5/6/98 -0400, you wrote: >Tim, hopefully you didn't jump in. Looks like (per DGO) that ADV is >128,800 and did only 106,300. Today's "M" didn't help. DGO shows >management at 39%, funds at 27% and banks at 9% on an issue of 28.1 >mil shares and a float of 15.1 million. Still, looks like it wants to >break higher, just stalled out thanks to the profit taking/mini >correction today. Did break a new high before stalling. > >Tom W > >-----Original Message----- >From: Tim Fisher >To: canslim@mail.xmission.com >Date: Tuesday, May 05, 1998 9:59 AM >Subject: [CANSLIM] RCII at 52wk hi on light vol > > >>March data follows, it's at 25% of ADV at 10AM market time, might >jump the >>gun and get it if it holds up till I get to work. >> >>RETAIL-MISC/DIV Renters Choice >>TICKER RCII >>EXCHANGE NSDQ >>X SECTOR 3 >>X INDUSTRY 165 >>24WK PCHG% 26.67 >>TREND EPGR 58.82 >>QEPS 0/-4 38.10 >>QEPS -1/-5 42.11 >>QEPS -2/-6 47.06 >>TREND SALE 63.98 >>P/E 12M 25.36 >>ROI 14.97 >>D/Equity 17.79 >>PEG F1 0.90 >>% INSIDERS 44.77 >>% INSTITUT 46.21 >> Tim Fisher, 1995 President, Pacific Fishery Biologists Ore-ROCK-On Rockhounding Web Site PFB Information mailto:tim@OreRockOn.com WWW http://OreRockOn.com - - ------------------------------ Date: Wed, 06 May 1998 06:20:22 PDT From: "Charles Morgan" Subject: Re: [CANSLIM] Re: I agree that management ownership over 50% is a concern, but has to be looked at on an individual basis. For example, I believe that in the early Microsoft days management and employees were taking some stock as pay versus pay raises. This would definitely make them concerned on making the company profitable. Who hasn't heard of all the millionaires at Microsoft. >From: "Tom Worley" >To: >Subject: Re: [CANSLIM] Re: "I" >Date: Wed, 6 May 1998 08:20:54 -0400 >Reply-To: canslim@lists.xmission.com > >It is frustrating to me that all sites don't have at least similar, if >not identical, data on mgnmt and inst holdings. Considering the time >lag between ownership, and the reporting of it (which can be easily a >month or more), I would never throw out a chart just because it >doesn't show any funds holdings, esp if it has been under accumulation >for more than a day or so. If you can find a website that provides >data on large block trading, you might check that for any trades that >are several times the ADV (if it's real low) or say, over 100,000 if >there is good liquidity. This might help you spot an institutional >buying or selling. You can also check the SEC site for 144 filings, >showing insiders (but not necessarily present management) preparing to >sell (or having already done so). > >One problem with the data lies in how "management" is defined vs >"insiders". If the company did an acquisition for stock, the sellors >of the acquired company become "insiders", but may or may not become >part of the management team. Usually this stock is locked up for at >least 90 days if they don't join mngmt, and for up to two years if >they do join. > >I probably don't put as much weight on "I" as I should. Basically, >mngmt ownership is more important to me as I am focused on small cap >stocks, which tend to be relatively young cos, where mngmt typically >will still own a large share. I agree with WON/Ryan's theory on not >wanting a company where mngmt owns over 50%, but I looks at results >first, then at whether there is a risk of them treating the co as if >it were "private". If they are producing the results in terms of >earnings and revenue growth, I don't care if they are taking huge >salaries or giving themselves great perks. What counts is what they >still bring to the bottom line. > >To me, there is little difference between a company with 0% funds >ownership and one with 3 or 4%. In many cases, that only represents >the difference between no funds ownership and one small cap fund >making its first tenative purchase. And that can happen with no >warning. If everything else looks great, sooner or later the funds >will find it, and by then I want to already own it. > >Tom W > >-----Original Message----- >From: Larry Horn >To: 'canslim@lists.xmission.com' >Date: Wednesday, May 06, 1998 7:58 AM >Subject: RE: [CANSLIM] Re: "I" > > >This discussion has been helpful. I have been using criteria for %Mgmt >and %Instit that I got from a tape that came with my IBD subscription, >"Investing to Win" an interview with David Ryan, which explains >CANSLIM. On the tape, he says that %Mgmt is important because it shows >that the company believes in what they are doing. He recommended that >%Mgmt not be over 50% because then the co can act more like it's >private. On the low end, he said that %Mgmt should be at least 15%. >This is pretty restrictive and has been knocking out about a third to >half of the cos in my first pass screen. I think I'll find better >charts if I don't use this as an absolute criteria. > >Similarly with %Instit, he recommends "some institutional ownership, >at least 1-2%" but it should usually be sold by the time it hits 30% >when everyone knows about it. He said that when it's too high, it can >make the stock riskier. Using this as an absolute criteria is very >restrictive and knocks out the majority of cos in my screen. Again, I >think I need to look at the charts before looking at both of these >numbers. > >Isn't %mgmt just (shares outstanding-float)/shares outstanding??? The >times I've checked different sources with different numbers they had >different floats (if they were listed anyway). > >The data from I mentioned from the tape is from notes I took while >listening to it. I hope it is accurate. > >Larry Horn > >-----Original Message----- >From: Tom Worley [SMTP:stkguru@netside.net] >Sent: Tuesday, May 05, 1998 6:09 AM >To: CANSLIM >Subject: Re: [CANSLIM] Re: "I" > >Dan, go back and look at the original post. The "3%" is the ownership >by management, the 18% is the funds percentage of the float and the 7% >is the bank's percentage of the float. All per DGO. If you wanted to >calculate the institutional holdings on MLHR, it would be .18 plus .07 >times the float. > >Tom W > >-----Original Message----- >From: Dan Musicant >To: canslim@lists.xmission.com >Date: Tuesday, May 05, 1998 12:06 AM >Subject: Re: [CANSLIM] Re: "I" > > >:>DVI 27% ? ? not in the books >:>MLHR 18% 3% 7% > >DGO shows MLHR at 18% owned by funds, 7% by banks. 18+7=3? Not last >time I checked. > >Dan > >- > > > > >- > > > >- > > ______________________________________________________ Get Your Private, Free Email at http://www.hotmail.com - - ------------------------------ Date: Wed, 06 May 1998 09:26:10 -0400 From: Connie Mack Rea Subject: [CANSLIM] OBV/MF: Marginal stock Members-- Sorry, but I do not have time this morning to comment further on this stock. It has a marginal OBV, but otherwise is sound. The stock is PM. If you have further questions, I will answer them when I return from some unavoidable chores. Connie Mack - - ------------------------------ Date: Wed, 06 May 1998 06:31:19 -0700 From: Tim Fisher Subject: RE: [CANSLIM] Re: "I" Using Ryan's criteria will limit you to good CANSLIM stocks, which IMHO is a very good thing. The chart pattern is not mentioned in HTMMIS as a requirement for CANSLIM for a reason. You could fall into a trap here of looking for good charts first, then rationalizing the fundamentals if they don't quite make the grade. I routinely find 30-50 candidates with my (restrictive) scans, and I am bound to see 10 or so good charts in that batch. That's more candidates than you really need, since you shouldn't be holding more than 5-10 stocks anyway. Someone who has since left this list, IMHO, fell into that trap and has since rationalized away just about all the CANSLIM criteria in favor of pretty charts. Which is great for them, but it just isn't CANSLIM anymore. And no, mgmnt. isn't necessarily the percentage of the sharesout that is not in the float. E.g. UBSGA has a large percentage owned by TCI which is not available unless TCI shareholders vote to sell it, thus not in the float, but not mgmt. either. There are many other examples of this including venture capital co. holdings from IPOs, etc. Feel free to correct me if I'm way off base here. At 08:00 AM 5/6/98 -0400, you wrote: >This discussion has been helpful. I have been using criteria for %Mgmt and %Instit that I got from a tape that came with my IBD subscription, "Investing to Win" an interview with David Ryan, which explains CANSLIM. On the tape, he says that %Mgmt is important because it shows that the company believes in what they are doing. He recommended that %Mgmt not be over 50% because then the co can act more like it's private. On the low end, he said that %Mgmt should be at least 15%. This is pretty restrictive and has been knocking out about a third to half of the cos in my first pass screen. I think I'll find better charts if I don't use this as an absolute criteria. > >Similarly with %Instit, he recommends "some institutional ownership, at least 1-2%" but it should usually be sold by the time it hits 30% when everyone knows about it. He said that when it's too high, it can make the stock riskier. Using this as an absolute criteria is very restrictive and knocks out the majority of cos in my screen. Again, I think I need to look at the charts before looking at both of these numbers. > >Isn't %mgmt just (shares outstanding-float)/shares outstanding??? The times I've checked different sources with different numbers they had different floats (if they were listed anyway). > >The data from I mentioned from the tape is from notes I took while listening to it. I hope it is accurate. > >Larry Horn > Tim Fisher, 1995 President, Pacific Fishery Biologists Ore-ROCK-On Rockhounding Web Site PFB Information mailto:tim@OreRockOn.com WWW http://OreRockOn.com - - ------------------------------ Date: Wed, 06 May 1998 06:31:21 -0700 From: Tim Fisher Subject: Re: [CANSLIM] Re: "I" But of course the "herd" does care, Tom. Witness NRVH which corrected (allowing me to get back in at a nice price, thank you very much MF) after the MF announced that its mgmt. gave itself "perks" such as a Leer Jet. At 08:20 AM 5/6/98 -0400, you wrote: >I probably don't put as much weight on "I" as I should. Basically, >mngmt ownership is more important to me as I am focused on small cap >stocks, which tend to be relatively young cos, where mngmt typically >will still own a large share. I agree with WON/Ryan's theory on not >wanting a company where mngmt owns over 50%, but I looks at results >first, then at whether there is a risk of them treating the co as if >it were "private". If they are producing the results in terms of >earnings and revenue growth, I don't care if they are taking huge >salaries or giving themselves great perks. What counts is what they >still bring to the bottom line. > Tim Fisher, 1995 President, Pacific Fishery Biologists Ore-ROCK-On Rockhounding Web Site PFB Information mailto:tim@OreRockOn.com WWW http://OreRockOn.com - - ------------------------------ Date: Wed, 6 May 1998 09:58:04 -0400 From: "Tony Austin" Subject: Re: [CANSLIM] HIV Ok, everybody start chanting "HIV, HIV, HIV......" I would appreciate your support Tony - - ------------------------------ Date: Wed, 6 May 1998 07:25:05 -0700 (PDT) From: Rich Subject: Re: [CANSLIM] its been a longtime and maybe the last time Harlan: I'm always interested in shorts, especially when the market is as extended as it is now. I will list these in my own order of preference from best possible short to least, IMHO. In terms of the companys' fundamentals, IMHO, BBY seems to be the most likely candidate. It is the only company which shows a n inconsistent pattern of growth though over the last few years. It does show great improvement of earnings per share over last four quarters (-.06, 0.15, 0.57, 1.45). but with no real increase in sales except for the last quarter (+21%). Currently its CANSLIM numbers are very strong RS=99, A/D=A and GRS=99. Henry Ford recommends waiting until both RS, GRS and A/D start to decline. It is also not over subscribed by institutions with only 15% of shares owned by them. It is the best performer in its industry for now. BBY may also be hurt by the shift to the under $1000 computer with its decreased margins. It needs to break down before I would short it but I have it on my watch list. WFMI has already broken down and its CANSLIM numbers are declining. However, it has a great pattern of consistent growth of both sales and earnings over the last 8 quarters. Also, its GRS has begun to decline going from 19 to 25th ranked. MEDI has no earnings but great increases in sales and is predicted to have earnings of $1.80 in 1999. It's GRS is weak at 34. HBOC has great earnings record, though its strength is weakening RS=83 A/D=B but good GRS=91 Thanks for posting your picks. Ciao, Rich - ---Harlan wrote: > > To those that know me know its been a longtime since I posted here > (theres a reason for that) but that usually what I post has some merits > to it and usually it all comes from a good understanding of The Model > Book study of the biggest winners in the last 45 yrs. and counting. For > the sake of sparing a "this is a canslim list and what does this have to > do with canslim" flame. This was the original study done by Bill which > is where CANSLIM came from in the 1st place. So here we go. > > Recent movers and shakers that've broken uptrends/ in process of > breaking uptrends and Reversals > > Ladies and Gentleman, > on the following issues it seems as though ELVIS has punched out. > Take a look at these issues with a 1yr chart and a 50day moving average > applied to them. > > MEDI- Meddimune 53.125 you'll notice for the 1st time (on a closing > basis) that this issue has broken its 50day moving ave going back at > least to Oct. 1997 . if your considering shorting this issue you need to > use a trailing stop of X% or any close above the 50day ave. (54.625) > and then let it ride, allow it time to do what it wants to do. With this > one we'll monitor it and let you know if it approaches the trailing > stop. > > WFMI- Whole Foods Markets 58.25 If you look closly you'll notice that > this issue is in the process of forming a head and shoulders top (THERES > THAT WORD!) any break below 55.50 and its on its way (thats your > neckline) although currently short term resistance is at the 50day > moving ave. (63.50ish) should you take a position anywhere around here > you need to use that as your trailing stop. > > BBY- Best Buy Whoa! I cant believe I said that! This issue has been used > by me numerous times as an example of the power of what a MECHANICAL > hands off system can do for you when you dont meddle with it by thinking > you know more than the mkt does. Had you bought it and used the 50day as > a trailing stop you took this issue from 15ish to 68ish WITHOUT IT EVER > VIOLATING THE 50DAY ON A CLOSING BASIS!!! WOW!! Well guess what ( here > comes that word again) this issue is in the process of forming a head > and shoulders top with the neck line being completed at 64.00 Any break > below 64 and it could spell bomb's away! until then this issue is > flirting with a close below the 50day moving ave. at 67.5625 currently > its at 68. interday it did go below it only to close back up above it by > a smidge. > Also this issue since it hit its peak on 4-15-98 has had a habit of a > shortterm downtrend much like IMRS before it got smashed (lower lows and > lower highs) So if your gonna lay out a short right here use a trailing > stop of 72.00 as your guide. Any close above that number spells a > reversal of the short term downtrend in place since 4-15-98. > > VWRX-VWR scientific 33.50 It doesnt take a rocket scientist to see that > this one has broken its uptrend thats been intact since Sept. 1997 In > last weeks selloff in the market this one broke and broke hard, (the > 50day ave that is) and when the Mkt had the recent snap back rally all > this one could muster was to rally back up to the 50day and curl back > over. If short this one use the 50day or X% as a trailing stop. the > 50day is currently at 33.75 or a straght 5% stop from here is at 35.25 I > like the 35.25 stop better because it allows for more fluctuation. > > PSFT- Peoplesoft 45.5 use the 50day ave as a guide this issue could > easily rally back to the average at 50 dollars so thats a quick 4.5 > points that this issue could rally. Me? I'll step aside for awhile and > watch to see if it can run up there. > > HBOC- HBO co. more and more that I look at it says its tired and just > has to fall out of bed once for me to want to get extremly serious about > shorting this one. Stay tuned for further developments on this one. > > As for the S&P 500? well it looks as though it recently sold off (and an > undercut) to the 50day ave and bounced then in the course of three days > rallied right back up to the 1130 level which is right around the > alltime highs that have been put in on 4-23 and 4-6 of 1998. So that to > me is resistance. and the selloff low of 4-27-98 THUS FAR looks to be > nwe support, so IF the S&P 500 did just hit its resistance at 1130.52 > this last run, and was turned back well then that means we COULD come > back down to the 1076 level on the S&P 500. > ALSO > How many of you remember the reversal 1234's of up and downtrend? > those that remember? isnt that what just happened in the S&P over the > last few days? > 4-22 opened at 1126.67 closed at 1130.54 and up for the day > 4-23 finished at the lows for the day (thats the reversal day/day one) > 4-24 you guessed it closed at the low for the day (day 2) > 4-27 here too closed at the low for the day,but more importantly hit the > 50day and stalled its decent. It was on this day that if you read > in between the lines the leaders were starting to stabilize and > and actually go up. > 4-28 this was what i think we'd call an inside day, with most of you > leaders on the move. That was your signal that we were done going down > > 4-29 Day one/reversal of the shortterm downtrend and we closed at the > high for the day. > 4-30 Day 2 closed at the high for the day > 5-1 Day 3 here too closed at the high for the day > 5-2 Reversal day ! at the open we followed thru to the upside only to > finish at or near the lows for the day. > > So if you follow the track what COULD that spell for tommorow? > down? its possible, to where? how bout those prior lows of last week for > a retest. > > just remember 1234 reversal 1234 reversal. Usually the way it works is > on the 3rd to 4th day of a reversal (extremly shorterm uptrend or > downtrend) > thats about the time you start to see some stabilization or > deterioration of the leaders make sense? > > Use you own judgement just calling it as I see it, this is by no means a > recomendation of any sort, simply a use it if you can type of post. > Should you want a more in depth on any of this email me personally. > Sincerly, > Harlan > > - > > _________________________________________________________ DO YOU YAHOO!? Get your free @yahoo.com address at http://mail.yahoo.com - - ------------------------------ Date: Wed, 6 May 1998 09:30:29 -0500 From: "Ricardo Bekin" Subject: [CANSLIM] MRE Medco Research (MRE) haven't seen this one mentioned here before, does anyone see any problems with it? (I know Tom will object to it trading at the Amex...) Ricardo P.S. I'm in. - - ------------------------------ Date: Wed, 6 May 1998 10:29:50 -0400 From: Larry Horn Subject: RE: [CANSLIM] Re: "I" - ------ =_NextPart_000_01BD78D9.EB815540 Content-Type: text/plain; charset="us-ascii" Content-Transfer-Encoding: 7bit Another thing that I've been doing with regard to "I" is when I go through "Your Weekend Review", I pick the stocks with Fund = A-, A, or A+. IBD ranks the mutual funds for their past 3 year performance and A- is the top 15-10%, A is the top 10-5%, and A+ is the top 5%. It then lists the best fund with a significant investment. I've been doing that because chapter 6 says "learn to sort through and recognize that certain Institutional sponsors are more savvy, have a stronger performance record, and are better at choosing stocks than others are." There are probably better ways of assessing this than the last 3 years performance but the data is so easily accessible I use it. Larry Horn - -----Original Message----- From: Tom Worley [SMTP:stkguru@netside.net] Sent: Wednesday, May 06, 1998 8:21 AM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] Re: "I" It is frustrating to me that all sites don't have at least similar, if not identical, data on mgnmt and inst holdings. Considering the time lag between ownership, and the reporting of it (which can be easily a month or more), I would never throw out a chart just because it doesn't show any funds holdings, esp if it has been under accumulation for more than a day or so. If you can find a website that provides data on large block trading, you might check that for any trades that are several times the ADV (if it's real low) or say, over 100,000 if there is good liquidity. This might help you spot an institutional buying or selling. You can also check the SEC site for 144 filings, showing insiders (but not necessarily present management) preparing to sell (or having already done so). One problem with the data lies in how "management" is defined vs "insiders". If the company did an acquisition for stock, the sellors of the acquired company become "insiders", but may or may not become part of the management team. Usually this stock is locked up for at least 90 days if they don't join mngmt, and for up to two years if they do join. I probably don't put as much weight on "I" as I should. Basically, mngmt ownership is more important to me as I am focused on small cap stocks, which tend to be relatively young cos, where mngmt typically will still own a large share. I agree with WON/Ryan's theory on not wanting a company where mngmt owns over 50%, but I looks at results first, then at whether there is a risk of them treating the co as if it were "private". If they are producing the results in terms of earnings and revenue growth, I don't care if they are taking huge salaries or giving themselves great perks. What counts is what they still bring to the bottom line. To me, there is little difference between a company with 0% funds ownership and one with 3 or 4%. In many cases, that only represents the difference between no funds ownership and one small cap fund making its first tenative purchase. And that can happen with no warning. If everything else looks great, sooner or later the funds will find it, and by then I want to already own it. Tom W - -----Original Message----- From: Larry Horn To: 'canslim@lists.xmission.com' Date: Wednesday, May 06, 1998 7:58 AM Subject: RE: [CANSLIM] Re: "I" This discussion has been helpful. I have been using criteria for %Mgmt and %Instit that I got from a tape that came with my IBD subscription, "Investing to Win" an interview with David Ryan, which explains CANSLIM. On the tape, he says that %Mgmt is important because it shows that the company believes in what they are doing. He recommended that %Mgmt not be over 50% because then the co can act more like it's private. On the low end, he said that %Mgmt should be at least 15%. This is pretty restrictive and has been knocking out about a third to half of the cos in my first pass screen. I think I'll find better charts if I don't use this as an absolute criteria. Similarly with %Instit, he recommends "some institutional ownership, at least 1-2%" but it should usually be sold by the time it hits 30% when everyone knows about it. He said that when it's too high, it can make the stock riskier. Using this as an absolute criteria is very restrictive and knocks out the majority of cos in my screen. Again, I think I need to look at the charts before looking at both of these numbers. Isn't %mgmt just (shares outstanding-float)/shares outstanding??? The times I've checked different sources with different numbers they had different floats (if they were listed anyway). The data from I mentioned from the tape is from notes I took while listening to it. I hope it is accurate. Larry Horn - -----Original Message----- From: Tom Worley [SMTP:stkguru@netside.net] Sent: Tuesday, May 05, 1998 6:09 AM To: CANSLIM Subject: Re: [CANSLIM] Re: "I" Dan, go back and look at the original post. The "3%" is the ownership by management, the 18% is the funds percentage of the float and the 7% is the bank's percentage of the float. All per DGO. If you wanted to calculate the institutional holdings on MLHR, it would be .18 plus .07 times the float. Tom W - -----Original Message----- From: Dan Musicant To: canslim@lists.xmission.com Date: Tuesday, May 05, 1998 12:06 AM Subject: Re: [CANSLIM] Re: "I" :>DVI 27% ? ? not in the books :>MLHR 18% 3% 7% DGO shows MLHR at 18% owned by funds, 7% by banks. 18+7=3? Not last time I checked. 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