From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #3083 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 8 2002 Volume 02 : Number 3083 In this issue: RE: Fundamental Philosophies (was: [CANSLIM] NXTL, SXT) Re: Fundamental Philosophies (was: [CANSLIM] NXTL, SXT) Re: Fundamental Philosophies (was: [CANSLIM] NXTL, SXT) [CANSLIM] Re: Stop Loss orders Re: [CANSLIM] Re: Stop Loss orders ---------------------------------------------------------------------- Date: Sat, 7 Dec 2002 11:24:37 -0600 From: "Katherine Malm" Subject: RE: Fundamental Philosophies (was: [CANSLIM] NXTL, SXT) This is a multi-part message in MIME format. - ------=_NextPart_000_1E3C_01C29DE3.39B8E1F0 Content-Type: text/plain; charset="US-ASCII" Content-Transfer-Encoding: 7bit Hi Andy, A quick question for you. Much of what you've listed here shows that you are looking for certain things in combination *after* you have identified a candidate. What do you then use as absolutes to identify a potential candidate from which you then look at the criteria you have listed? Katherine -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of AJAskey@aol.com Sent: Friday, December 06, 2002 9:57 PM To: canslim@lists.xmission.com Subject: Re: Fundamental Philosophies (was: [CANSLIM] NXTL, SXT) Good question that I had to think about. I guess there are no absolutes I go by but there are some criteria that needs perfection elsewhere to be overlooked. 1) I require insiders to own at least 5%. This is the number WON cites and it seems like a good cut off. But I would probably buy a "perfect" stock that had 4.5% insider ownership and the insiders had just purchased 2% last quarter. 2) Growth of 25%. I look at growth so many ways with my Stock Investor Pro formulas that this does not require any one metric to be 25%. I look at 3 year average EPS and Sales growth, 3 year least-squares fit EPS and Sales growth, TTM month growth, most recent quarter growth, estimated growth for the upcoming quarter. I look for a nice trend upwards. FOSL had negative growth but the trend line was very nicely up. Since the most recent and estimated upcoming quarters are 25%+ it is on my list. 3) Cash Flow per Share (CFPS). WON suggests this should be 20% greater than EPS. This makes sense but I've seen some companies (THO for one) that were at 1.1 for CFPS but at 2.0+ for Free CFPS and Operating CFPS. I think this was a function of the way some items were recorded and THO is on my list. 4) ROE. I use a ROE equation with equity calcuated at the beginning of the period instead of the average of the TTM that is usually shown. (This is how Buffett suggests doing it and I use it to tell people I am a "value" investor - LOL). Since this is not the ROE that IBD or MarketGuide shows, I may or may not meet the 17 as defined by others. If I see ROE is 15 but it is trending upward then I don't automatically omit the stock. One note is that stocks meeting my growth criteria rarely have an ROE less than 15 as ROE and growth are coupled in the math. 5.) I don't pay much attention to margins unless net is only 2 or 3%. I've only found hospital type stocks that have CANSLIM like growth with this low margins. Usually something with this low margins will not be growing long. Everything else is a secondary characteristic that I will overlook if the chart is great. Andy In a message dated 12/6/2002 8:33:17 AM Central Standard Time, kmalm@earthlink.net writes: If you were to pare down WON's work, what are the absolutes? - ------=_NextPart_000_1E3C_01C29DE3.39B8E1F0 Content-Type: text/html; charset="US-ASCII" Content-Transfer-Encoding: quoted-printable
Hi Andy,
 
A quick question for you. Much of = what=20 you've listed here shows that you are looking for certain things in = combination=20 *after* you have identified a candidate. What do you then use as = absolutes to=20 identify a potential candidate from which you then look at the criteria = you have=20 listed?
 
Katherine
-----Original Message-----
From:=20 owner-canslim@lists.xmission.com=20 [mailto:owner-canslim@lists.xmission.com]On Behalf Of=20 AJAskey@aol.com
Sent: Friday, December 06, 2002 9:57=20 PM
To: canslim@lists.xmission.com
Subject: Re: = Fundamental=20 Philosophies (was: [CANSLIM] NXTL, SXT)

Good question that I had to = think=20 about.  I guess there are no absolutes I go by but there are some = criteria that needs perfection elsewhere to be overlooked.

1) I = require=20 insiders to own at least 5%.  This is the number WON cites and it = seems=20 like a good cut off.  But I would probably buy a "perfect" stock = that had=20 4.5% insider ownership and the insiders had just purchased 2% last=20 quarter.

2) Growth of 25%.  I look at growth so many ways = with my=20 Stock Investor Pro formulas that this does not require any one metric = to be=20 25%.  I look at 3 year average EPS and Sales growth, 3 year = least-squares=20 fit EPS and Sales growth,  TTM month growth, most recent quarter = growth,=20 estimated growth for the upcoming quarter.  I look for a nice = trend=20 upwards.  FOSL had negative growth but the trend line was very = nicely=20 up.  Since the most recent and estimated upcoming quarters are = 25%+ it is=20 on my list.

3) Cash Flow per Share (CFPS).  WON suggests = this=20 should be 20% greater than EPS.  This makes sense but I've seen = some=20 companies (THO for one) that were at 1.1 for CFPS but at 2.0+ for Free = CFPS=20 and Operating CFPS.  I think this was a function of the way some = items=20 were recorded and THO is on my list.

4)  ROE.  I use = a ROE=20 equation with equity calcuated at the beginning of the period instead = of the=20 average of the TTM that is usually shown.  (This is how Buffett = suggests=20 doing it and I use it to tell people I am a "value" investor - = LOL). =20 Since this is not the ROE that IBD or MarketGuide shows, I may or may = not meet=20 the 17 as defined by others.  If I see ROE is 15 but it is = trending=20 upward then I don't automatically omit the stock.  One note is = that=20 stocks meeting my growth criteria rarely have an ROE less than 15 as = ROE and=20 growth are coupled in the math.

5.)  I don't pay much = attention to=20 margins unless net is only 2 or 3%.  I've only found hospital = type stocks=20 that have  CANSLIM like growth with this low margins.  = Usually=20 something with this low margins will not be growing = long.

Everything=20 else is a secondary characteristic that I will overlook if the chart = is=20 great.

Andy

In a message dated 12/6/2002 8:33:17 AM = Central=20 Standard Time, kmalm@earthlink.net writes:


If you were to pare down WON's work, what are the=20 = absolutes?


 - ------=_NextPart_000_1E3C_01C29DE3.39B8E1F0-- - - - -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: Sat, 7 Dec 2002 17:58:55 EST From: AJAskey@aol.com Subject: Re: Fundamental Philosophies (was: [CANSLIM] NXTL, SXT) - --part1_126.1c401ab5.2b23d72f_boundary Content-Type: text/plain; charset="US-ASCII" Content-Transfer-Encoding: 7bit Katherine, This is were it gets creative. I have a scan for almost pure HTMMIS criteria and then a scan that looks for trending growth using both past data and estimated projections. I have some other scans that were written so long ago I can't remember what makes them special or different from the basic scans - LOL. I also enter IBDs WER list and New America lists into portfolios and check each of these without scanning. This sounds like a lot but it really isn't. The original setup of screens and data took quite some time but now I spend more time tinkering with my software than looking for stocks. The same basic group of stocks make each list and the list only significantly changes after earnings season hits the data. The only reason I run multiple screens is to find new growers and anything that is borderline but really looks good. Since this is automated and I already have a core list started it takes an hour a week to do the scanning. I think if someone were to use IBDs WER list in a tool like Stock Investor Pro they could easily sort the wheat from the chaff. Many of the stocks on my list came from the WER list because rigid screening can eliminate some good stocks. My main view in Stocks Investor Pro allows me to evaluate 150 stocks in about and hour. Since lists don't change significantly each week I only need to glance over the new data to see any symbols I don't have burnt into my memory from over-analysis :) My view can be found and http://InvestmentDataAnalysis/Documents/WatchListSIP.xls for anyone interested in what I look at. Tabs one and two of the file are summaries and I've added tab three to the spreadsheet recents for others although I don't define what each field is. Tab three is the one I use. Post at my site if you have specific questions. Andy In a message dated 12/7/2002 11:27:49 AM Central Standard Time, kmalm@earthlink.net writes: > Much of what you've listed here shows that you are looking for certain > things in combination *after* you have identified a candidate. What do you > then use as absolutes to identify a potential candidate from which you then > look at the criteria you have listed? - --part1_126.1c401ab5.2b23d72f_boundary Content-Type: text/html; charset="US-ASCII" Content-Transfer-Encoding: 7bit Katherine,

This is were it gets creative.  I have a scan for almost pure HTMMIS criteria and then a scan that looks for trending growth using both past data and estimated projections.  I have some other scans that were written so long ago I can't remember what makes them special or different from the basic scans - LOL.  I also enter IBDs WER list and New America lists into portfolios and check each of these without scanning.

This sounds like a lot but it really isn't.  The original setup of screens and data took quite some time but now I spend more time tinkering with my software than looking for stocks.  The same basic group of stocks make each list and the list only significantly changes after earnings season hits the data.  The only reason I run multiple screens is to find new growers and anything that is borderline but really looks good.  Since this is automated and I already have a core list started it takes an hour a week to do the scanning.

I think if someone were to use IBDs WER list in a tool like Stock Investor Pro they could easily sort the wheat from the chaff.  Many of the stocks on my list came from the WER list because rigid screening can eliminate some good stocks.  My main view in Stocks Investor Pro allows me to evaluate 150 stocks in about and hour.  Since lists don't change significantly each week I only need to glance over the new data to see any symbols I don't have burnt into my memory from over-analysis :)

My view can be found and http://InvestmentDataAnalysis/Documents/WatchListSIP.xls for anyone interested in what I look at.  Tabs one and two of the file are summaries and I've added tab three to the spreadsheet recents for others although I don't define what each field is.  Tab three is the one I use. Post at my site if you have specific questions.

Andy

In a message dated 12/7/2002 11:27:49 AM Central Standard Time, kmalm@earthlink.net writes:


Much of what you've listed here shows that you are looking for certain things in combination *after* you have identified a candidate. What do you then use as absolutes to identify a potential candidate from which you then look at the criteria you have listed?


 - --part1_126.1c401ab5.2b23d72f_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: Sat, 7 Dec 2002 19:27:06 EST From: AJAskey@aol.com Subject: Re: Fundamental Philosophies (was: [CANSLIM] NXTL, SXT) - --part1_118.1bd06111.2b23ebda_boundary Content-Type: text/plain; charset="US-ASCII" Content-Transfer-Encoding: 7bit This link should be http://groups.msn.com/InvestmentDataAnalysis/Documents/WatchListSIP.XLS. Andy In a message dated 12/7/2002 5:01:08 PM Central Standard Time, AJAskey@aol.com writes: > http://InvestmentDataAnalysis/Documents/WatchListSIP.xls - --part1_118.1bd06111.2b23ebda_boundary Content-Type: text/html; charset="US-ASCII" Content-Transfer-Encoding: 7bit This link should be http://groups.msn.com/InvestmentDataAnalysis/Documents/WatchListSIP.XLS.

Andy

In a message dated 12/7/2002 5:01:08 PM Central Standard Time, AJAskey@aol.com writes:


http://InvestmentDataAnalysis/Documents/WatchListSIP.xls


 - --part1_118.1bd06111.2b23ebda_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: Sun, 08 Dec 2002 09:03:33 -0800 From: Karen White Subject: [CANSLIM] Re: Stop Loss orders Morning folks.... I may already know this answer but maybe I dont so want to ask. In an effort to tighten up and Not ride stocks down I have been putting stop losses in place and "trailing" them up if the stock goes up and leaving them in place if the stock goes down. I have certainly been stopped out a lot lately doing this. But... the other morning I had a SL on a stock 1.20 below the closing price. First thing on the open this stock was sold and the stock immediately jumped back up to the price it had been at. How does this happen? Is the stop loss on someones radar and they just go get it on the open someway? But since it takes the stocks trading at that price to make it an open order doesnt there have to be another trade at that price? Is the fix to never put stop losses on stocks that are more thinly traded? What would be a good number of shares traded to consider "mental stop losses" rather than putting in the orders.? This stocks (MVSN) has average daily trading of 702 thousand shares.. That doesnt sound too light to me but maybe it is... Is there another answer to do this? Thanks for all the help. This market is truly frustrating!!! Karen - - - -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: Sun, 8 Dec 2002 11:31:38 -0700 From: "Patrick Wahl" Subject: Re: [CANSLIM] Re: Stop Loss orders On 8 Dec 2002 at 9:03, Karen White wrote: > stock was sold and the stock immediately jumped back up to the price it had been > at. How does this happen? Is the stop loss on someones radar and they just go > get it on the open someway? But since it takes the stocks trading at that price > to make it an open order doesnt there have to be another trade at that price? > > Is the fix to never put stop losses on stocks that are more thinly > traded? What would be a good number of shares traded to consider "mental > stop losses" rather than putting in the orders.? This stocks (MVSN) has > average daily trading of 702 thousand shares.. That doesnt sound too light to me > but maybe it is... Is there another answer to do this? Thanks for all the help. > This market is truly frustrating!!! Karen Concur on the frustrating part. The market gapped down on Friday at the open because of the disappointing Employment report, that is probably what shook you out of MVSN. If your stop was just 1.20 below the previous day's close, I would say that is too tight. There is a lot of noise in many Nasdaq stocks, and I think to stay in you need a wider stop. I've never mastered stop placement, one thought is you put in a very wide stop to guard against the calamitous event that really pounds a stock, then you make any sell decision based on the end of day price. That prevents you from being stopped out by any intraday noise at least. The curious thing about stops, I discovered back when I used to back test various trading strategies, is that adding stops to almost any trading system will worsen the performance. That is, if you let some indicator be both the signal to enter and exit a position, look at the results, and then add stops to the system, the results will almost always be worse than without stops. - - - -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 #3083 ****************************** 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.