From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #2558 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 Tuesday, July 2 2002 Volume 02 : Number 2558 In this issue: [CANSLIM] Fw: more incorrect earnings forecast data [T200206300070] RE: [CANSLIM] IBD "Bull" Call Re: [CANSLIM] IBD "Bull" Call Re: [CANSLIM] M tomorrow Re: [CANSLIM] IBD "Bull" Call ---------------------------------------------------------------------- Date: Tue, 2 Jul 2002 22:09:47 -0400 From: "Tom Worley" Subject: [CANSLIM] Fw: more incorrect earnings forecast data [T200206300070] more feedback from DGO on their presented data for earnings forecasts. Based on this, I think I am either going to have to check the math before I include or exclude a stock on my WWW list, or else totally ignore the forecast and just focus on the chart, and leave any interested users to do their own due diligence on whether earnings growth looks to be 20% or not. - ----- Original Message ----- From: To: Sent: Tuesday, July 02, 2002 1:13 PM Subject: RE: more incorrect earnings forecast data [T200206300070] Hello again Tom, Thank you for the follow up email. In a nutshell, Yes. The issue you raise is an important one so we would like to take this time to address you concern in detail. There a lot of issues out there in the investment community right now dealing with this inconsistency in financial reporting going around. This issue has been put to forefront due to certain events over the past twelve months. In fact, FASB has recently changed its rules relating to amortization of goodwill and new and more limiting rules will likely be in place soon in the accounting community. This recent Ask Bill addresses the topic: http://www.investors.com/askBill/SearchResults.asp?ID=606&StartDate=4&TopicI D=4&code=ByTopic Since we are not a brokerage with analysts making buy/sell/hold recommendations, we outsource our earnings estimates to what is generally considered the largest and most respected supplier of this earnings estimate data, Thomson Financial, the parent company of First Call. But our Research Department is also not going to change the way we have been processing earnings data for years and years to create our William O'Neil Database to conform with Thomson. The profit figures on which we base the EPS rating and the EPS figures you see in IBD and Daily Graphs Online are "normalized" earnings per share, which are a type of pro forma results. These don't always conform with Generally Accepted Accounting Principles (GAAP), but they better reflect a company's ongoing operations. Specifically, the after-tax amount (if given) of one-time gains and charges, extraordinary items, and other nonrecurring items are backed out of net income by our research staff in order to arrive at a "normalized" figure. Our studies have found that the normalized figure is the most appropriate in analyzing a stock's past earnings growth and its potential going forward. In reference specifically to next year Thomson Financial figure that may not match the EPS Percentage Change, they tend to follow what is generally referred to as "Street" figures or "Wall Street" estimates that exclude certain non-recurring items. Many Wall Street analysts choose to ignore one-time charges altogether, even though some are considered part of ordinary operations under generally accepted accounting principles. They argue that such write-offs are a relic of the past and say little about the outlook for a company's future. Sometimes items that qualify for exclusion in "Street" terms do not fit in the more restrictive William O'Neil and Company Research Department earnings modeling rules. Thus the difference between the reported William O'Neil figure you see in Fiscal 2001 and the corresponding percentage change for the Fiscal 2002 EPS estimate. Until the SEC, the Financial Accounting Standards Board (FASB, which outlines Generally Accepted Accounting Principles, GAAP) and others agree to a uniform earnings reporting standard, these types of differences will be seen from time to time in the financial community. You can read recent news about these types of issues at www.fasb.org and http://www.sec.gov/investor.shtml You can also visit www.investors.com and click on "click here for today's answer" in the Ask Bill O'Neil Q & A section. There are numerous answers to questions about the O'Neil database and commentary specifically related to certain FASB rules and pro forma figures. Please email us again if we can help in any way. Sincerely, Paul Daily Graphs Online www.dailygraphs.com - -----Original Message----- Subject: Re: more incorrect earnings forecast data [T200206300070Z1265502] Sender : stkguru@bellsouth.net Tracking Number : T200206300070Z1265502 Pool : Daily Graphs Online Sent to : Date : 7/1/02 5:28 PM - --- Paul, so what you seem to be telling me is that I should get used to this confusing portrayal of two different data sets, one displaying the actual prior year (calculated by the 50 research analysts on WON staff), and a current year estimate, and percentage change, calculated by ThompsonFN which uses earnings for last year (not displayed)?? WON, HTMMIS, and IBD all advocate only looking at stocks with a 20% or better earnings forecast. So now who's forecast do I use? ThompsonFN, using actual results for the prior year? Or calculate my own percentage, guessing what the WON staff of 50 researchers would have come up with? I am cc'ing my online CANSLIM discussion group, since many there also subscribe to DGO, and are likely to be as confused as I am by this mixed presentation. - ----- Original Message ----- From: Sent: Monday, July 01, 2002 11:12 AM Subject: RE: more incorrect earnings forecast data [T200206300070] Hello Tom, Thank you for the email. Along with additional data items, the new version of Daily Graphs Online features three years of annual EPS data provided by ThomsonFN.com, including two years of estimates. You can visit Thomson Financial at its home page http://www.thomsonfn.com as they are a global provider of data, analysis and information for the investment community. The three years of data from Thomson Financial - their last year's reported EPS, this year's EPS estimate and next year's EPS estimate - occasionally does not match in terms of Estimate Percentage Change from what you see in Daily Graphs Online. The estimate percentage change figure is based on Thomson Financial's last year reported EPS which is not displayed in Daily Graphs' 7-Year Annual Earnings Per Share area. The EPS estimate percentage change figures are calculated using ThomsonFN data to maintain an apples to apples comparison. In certain cases, the ThomsonFN actual EPS data for the most recent fiscal year does not match the actual EPS figure in the William O'Neil + Co, Inc. database that is displayed in Daily Graphs Online. The discrepancy in the EPS estimate percentage change is due to the variation in the methods used by William O'Neil + Co., Inc. and ThomsonFN when processing EPS data. The William O'Neil + Co., Inc. research department is comprised of about 50 analysts and all earnings data is processed through this department from a variety of public sources such as company press releases and SEC filings. If a company reports earnings that include non-recurring, extraordinary items, our research staff will go the extra step to back this out so as to report earnings from continuing operations, after tax. The cases that you mention fall into three categories. Sometimes Thomson does not have a prior year's estimate as is the case for ELTE, MCRI and AIRM, thus an N/A is displayed. Other times the Thomson figures for the prior year are negative as is NWRE, they have a loss of $.05/shr for the prior year's EPS. A negative to a positive is displayed as N/A. However, the William O'Neil & Co Research Dept has a positive figure as we have excluded certain non-recurring acquisition costs. The third case is similar, the Thomson figure and our Research figure are just simply different but both are positive. MSC has a figure of about $1.10, that is why the Percentage Change shows down 65%. The Research figure is the one you see, a loss of $.22/share with the blue triangle indicating certain non-recurring charge are included in the EPS figure, specifically an $8.4 mil impairment charge. One thing to keep in mind is we still have our Image Map feature under the Help toolbar. The image map feature gives a sample chart of the Daily and Weekly views and you can click on any items to see a detailed glossary description of the item. We apologize for the confusion. Feel free to contact us if you have further questions. Sincerely, Paul Daily Graphs Online www.dailygraphs.com - -----Original Message----- Subject: more incorrect earnings forecast data [T200206300070Z1263755] Sender : stkguru@bellsouth.net Tracking Number : T200206300070Z1263755 Pool : Daily Graphs Online Sent to : "DGOnline Customer Service" Date : 6/30/02 7:20 AM - --- NWRE - you show 2001 at 5 cents, forecast for 2002 at 22 cents, but the change is shown as N/A rather than 340% MCRI - 49 cents for 2001, 92 cents forecast for 2002, still the change is N/A AIRM - 69 cents for 2001, 56 cents forecast for 2002, again change shown as N/A Tom Worley stkguru@bellsouth.net AIM: TexWorley - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Tue, 2 Jul 2002 22:20:49 -0400 From: "Duke Miller" Subject: RE: [CANSLIM] IBD "Bull" Call This is a multi-part message in MIME format. - ------=_NextPart_000_0050_01C22216.B8747520 Content-Type: text/plain; charset="US-ASCII" Content-Transfer-Encoding: 7bit Until 100 % of their subscribers barf in their own lap. How often do they need to remind (most of) us that we screwed up and held when we should have sold, albeit with 20/20 hindsight! How popular do you think Crest Toothpaste would be if they ran ads over and over and over (like they do), but hammered home the message that Crest keeps your breath from smelling like the bottom of a garbage can at a dog food factory and keeps your gums from oozing puss and bleeding ? Brush, floss, Crest! Duke -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com] On Behalf Of J. Lobatto Sent: Tuesday, July 02, 2002 9:04 PM To: canslim@lists.xmission.com Subject: [CANSLIM] IBD "Bull" Call I wonder how long IBD is going to continue running that ad I've seen there featuring a graphic illustrating how they called the new bull market last fall??? - ------=_NextPart_000_0050_01C22216.B8747520 Content-Type: text/html; charset="US-ASCII" Content-Transfer-Encoding: quoted-printable Message
Until 100 % of = their=20 subscribers barf in their own lap. 
 
How often do = they need to=20 remind (most of) us that we screwed up and held when we should have = sold,=20 albeit with 20/20 hindsight!
 
How popular do = you think=20 Crest Toothpaste would be if they ran ads over and over and over (like = they do),=20 but hammered home the message that Crest keeps your breath from smelling = like=20 the bottom of a garbage can at a dog food factory and keeps your gums = from=20 oozing puss and bleeding ?
 
Brush, floss,=20 Crest!
 
Duke
 
 
 
 -----Original = Message-----
From:=20 owner-canslim@lists.xmission.com = [mailto:owner-canslim@lists.xmission.com] On=20 Behalf Of J. Lobatto
Sent: Tuesday, July 02, 2002 9:04=20 PM
To: canslim@lists.xmission.com
Subject: [CANSLIM] = IBD=20 "Bull" Call

I wonder how long IBD = is going to=20 continue running that ad I've seen there featuring a graphic=20 illustrating how they called the new bull market last=20 fall???
- ------=_NextPart_000_0050_01C22216.B8747520-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Tue, 2 Jul 2002 19:58:11 -0700 From: "zillagirl" Subject: Re: [CANSLIM] IBD "Bull" Call This is a multi-part message in MIME format. - ------=_NextPart_000_003E_01C22202.CB6EA420 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable I have a theory on small caps,although Im sure some of you are tired of = hearing from me today.(smile) there is a lot of money to be made in the = right small caps. I would almost bet IBD does research in all caps -not = just the ones he posts on his site. Esp. for small cap mutual funds, = etc. Some of them have good earnings, new products, the M is on their = side right now compared to the other indexes. Someone is buying these = stocks and making a lot of money on them before they ever hit a canslim = list.(you can buy a lot more shares at 5.00 then with 25.00 eventhough = the risk is greater)If in this market the risk can be greater. I cant = help but think that there is a trading system with established % on = earnings, growth, etc. but it is not available to us. And Im sure it = would not be with the same criteria as the canslim system we are = given. Its great to ride a stock from 5 to 15 or 20 dollars and then a = whole new set of buyers comes in. I could be wrong but if the research = is done I feel it should be made available to us-buyer beware. In this = market when small caps seem to have been hit the least and canslim = seems to be in reverse half the time, we could use more then 'one day = the market will turn' from IBD.I would like to think bill is protecting = us from bad investments but as anyone who read my posts today can see-my = rose colored glasses got broken somewhere. PS dont get me wrong I love = canslim but its like following the indexes-when they drop - you might = have to think about shorting.=20 ----- Original Message -----=20 From: Tom Worley=20 To: canslim@lists.xmission.com=20 Sent: Tuesday, July 02, 2002 6:15 PM Subject: Re: [CANSLIM] IBD "Bull" Call interesting he avoids mentioning the Russell 2000, is it just too = small for him? ----- Original Message -----=20 From: Katherine Malm=20 To: canslim@lists.xmission.com=20 Sent: Tuesday, July 02, 2002 9:12 PM Subject: Re: [CANSLIM] IBD "Bull" Call Hi Jon, I've often wondered about that same thing as it's certainly not = obvious there's a Bull market anywhere in sight if looking at the = Nasdaq, S&P500 or Dow. Here's an interesting "Ask Bill" from today that = might "explain" their point of view. --Katherine Ask Bill O'Neil 7/2/02 =20 Q: Would you classify the period from late Sept. 2001 to Jan. = 2002 as a "bull market" or a "bear-market rally"? =20 - Submitted from Thornhill, Canada =20 =20 A: The bear market is alive and kicking on the Nasdaq. But the = smaller-cap indexes such as the S&P 600 and S&P MidCap 400 are just 10% = to 11% below their all-time highs. For them, the current decline is a = correction in a bull market. =20 ----- Original Message -----=20 From: J. Lobatto=20 To: canslim@lists.xmission.com=20 Sent: Tuesday, July 02, 2002 8:04 PM Subject: [CANSLIM] IBD "Bull" Call I wonder how long IBD is going to continue running that ad I've seen = there featuring a graphic illustrating how they called the new bull = market last fall??? - ------=_NextPart_000_003E_01C22202.CB6EA420 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
I have a theory on small caps,although = Im sure some=20 of you are tired of hearing from me today.(smile)  there is a lot = of money=20 to be made in the right small caps. I would almost bet IBD does research = in all=20 caps -not just the ones he posts on his site.  Esp. for small cap = mutual=20 funds, etc. Some of them have good earnings, new products, the M is on = their=20 side right now compared to the other indexes. Someone is buying = these=20 stocks and making a lot of money on them before they ever hit a canslim=20 list.(you can buy a lot more shares at 5.00 then with 25.00 = eventhough the=20 risk is greater)If in this market the risk can be greater. I cant help = but think=20 that there is a trading system with established % on earnings, growth, = etc. but=20 it is not available to us. And Im sure it would not be   with=20 the  same criteria as the canslim system we are given. Its = great to=20 ride a stock from 5 to 15 or 20 dollars and then a whole new set of = buyers comes=20 in. I could be wrong but if the research is done I feel it should be = made=20 available to us-buyer beware.  In this market when small caps seem = to have=20 been hit the least and canslim  seems to be in reverse half the = time, we=20 could use more then 'one day the market will turn' from IBD.I would like = to=20 think bill is protecting us from bad investments but as anyone who read = my posts=20 today can see-my rose colored glasses got broken somewhere. PS dont get = me wrong=20 I love canslim but its like following the indexes-when they drop - you = might=20 have to think about shorting.
----- Original Message -----
From:=20 Tom=20 Worley
Sent: Tuesday, July 02, 2002 = 6:15=20 PM
Subject: Re: [CANSLIM] IBD = "Bull"=20 Call

interesting he avoids mentioning the Russell = 2000, is it=20 just too small for him?
 
----- Original Message -----=20
From: Katherine Malm=20
Sent: Tuesday, July 02, 2002 9:12 PM
Subject: Re: [CANSLIM] IBD "Bull" Call

Hi Jon,
 
I've often wondered about that same thing as it's certainly not = obvious=20 there's a Bull market anywhere in sight if looking at the Nasdaq, = S&P500=20 or Dow. Here's an interesting "Ask Bill" from today that might = "explain" their=20 point of view.
 
--Katherine
 

Ask Bill O'Neil 7/2/02

 
 Q: Would you = classify the=20 period from late Sept. 2001 to Jan. 2002 as a "bull market" or a = "bear-market rally"?    
- Submitted from = Thornhill,=20 Canada