From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #1799 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 Saturday, November 10 2001 Volume 02 : Number 1799 In this issue: Re: [CANSLIM] M in 2002 Re: [CANSLIM] M in 2002 Re: [CANSLIM] [Non-CANSLIM] Off topic - Budget Rent-A-Car Re: [CANSLIM] Actually P/E Selling Rule Re: [CANSLIM] Actually P/E Selling Rule Re: [CANSLIM] Actually P/E Selling Rule Re: [CANSLIM] [Non-CANSLIM] Off topic - Budget Rent-A-Car ---------------------------------------------------------------------- Date: Sat, 10 Nov 2001 09:17:12 -0500 From: "Tom Worley" Subject: Re: [CANSLIM] M in 2002 This is a multi-part message in MIME format. - ------=_NextPart_000_009C_01C169C8.7B856540 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Rolf, comments below. Tom Worley stkguru@netside.net AIM: TexWorley ----- Original Message -----=20 From: rolf hertenstein=20 To: canslim@lists.xmission.com=20 Sent: Saturday, November 10, 2001 8:42 AM Subject: [CANSLIM] M in 2002 NBR's Market Monitor last night (Frank Cochrane of Investment Timing Consultants) claims that based on the market P/E currently around 36 = and an historical market P/E of 15, he sees the DOW at 5500 and the NASD 600-800 in 2002. That got me to wondering if: 1. the market P/E is currently that high - I see no evidence of that, = S&P500 around 20, I would guess overall market in the mid - 20s at best. = Bear in mind that many high growth stock PE ratio's are real high right = now because earnings have crashed. A steady recovery in 2002 will lower = those ratios rapidly. 2. if market P/E =3D 15 is the norm - I simply don't believe this, and = would be interested in his "facts" and especially got me wondering 3. if the market *does* historically tend to correct to it's=20 'normal' P/E - this I would tend to agree with I know WON isn't bothered by high P/Es for an individual CANSLIM stock, but that assumes growth (C and A) and this market is not flush with strong earnings growth stocks. So any comments on Cochrane's assertions, even if his numbers are overdone? - the only way I see his = assertions as valid is if you assume that the economy slides further = into a recession, even depression, and corporate profits fail to even = slightly recover. That also assumes consumer spending shrinks much = further both in USA and globally, unemployment significantly increases, = and maybe even throw in a global conflict or several large regional = conflicts, possibly greatly affecting the supply of oil, causing a huge = spike in energy prices. But where's the facts to support this "worst = case scenario"?? Cochrane also sees 2001 closing near lows for the year, a rally in Q1 of 2002, the a steady decline. He didn't really say where he came up with that forecast behavior. - given the above assumptions, I guess = that is all possible. But I really detest rabble rousing shock effect = commentators that will say anything, without supporting it with logical = and rational facts and discussion, just so they can get attention for 15 = seconds. What's his agenda, aside from more clients willing to let him = "time the market" with their money? I have seen very few market timers = that actually made money for their clients. Rolf - -To subscribe/unsubscribe, email "majordomo@xmission.com" -In the email body, write "subscribe canslim" or -"unsubscribe canslim". Do not use quotes in your email. - ------=_NextPart_000_009C_01C169C8.7B856540 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Rolf, comments below.
 
Tom Worley
stkguru@netside.net
AIM:=20 TexWorley
----- Original Message -----
From:=20 rolf=20 hertenstein
To: canslim@lists.xmission.com =
Sent: Saturday, November 10, = 2001 8:42=20 AM
Subject: [CANSLIM] M in = 2002

NBR's Market Monitor last night (Frank Cochrane of Investment=20 Timing
Consultants) claims that based on the market P/E currently = around 36=20 and
an historical market P/E of 15, he sees the DOW at 5500 and the = NASD
600-800 in 2002.  That got me to wondering if:
1. the = market=20 P/E is currently that high - I see no evidence = of that,=20 S&P500 around 20, I would guess overall market in the mid - 20s at = best.=20 Bear in mind that many high growth stock PE ratio's are real high = right now=20 because earnings have crashed. A steady recovery in 2002 will lower = those=20 ratios rapidly.

2. if market P/E =3D 15 is the norm - I = simply=20 don't believe this, and would be interested in his = "facts"

and especially got me wondering
3. if the market *does*=20 historically tend to correct to it's
    'normal' = P/E -=20 this I would tend to agree with

I = know WON=20 isn't bothered by high P/Es for an individual CANSLIM
stock, but = that=20 assumes growth (C and A) and this market is not flush
with strong = earnings=20 growth stocks.  So any comments on Cochrane's
assertions, even = if his=20 numbers are overdone? - the only way I see his = assertions=20 as valid is if you assume that the economy slides further into a = recession,=20 even depression, and corporate profits fail to even slightly recover. = That=20 also assumes consumer spending shrinks much further both in USA and = globally,=20 unemployment significantly increases, and maybe even throw in a global = conflict or several large regional conflicts, possibly greatly = affecting the=20 supply of oil, causing a huge spike in energy prices. But where's the = facts to=20 support this "worst case scenario"??

Cochrane also sees = 2001=20 closing near lows for the year, a rally in
Q1 of 2002, the a steady = decline.  He didn't really say where he came
up with that = forecast=20 behavior. - given the above assumptions, I guess = that is=20 all possible. But I really detest rabble rousing shock effect = commentators=20 that will say anything, without supporting it with logical and = rational facts=20 and discussion, just so they can get attention for 15 seconds. What's = his=20 agenda, aside from more clients willing to let him "time the market" = with=20 their money? I have seen very few market timers that actually made = money for=20 their clients.

 Rolf


-
-To=20 subscribe/unsubscribe, email "majordomo@xmission.com"
-In= the=20 email body, write "subscribe canslim" or
-"unsubscribe = canslim".  Do=20 not use quotes in your email.
- ------=_NextPart_000_009C_01C169C8.7B856540-- - - - -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, 10 Nov 2001 08:40:40 -0600 From: "Katherine Malm" Subject: Re: [CANSLIM] M in 2002 You bring up an interesting question, Rolf. In my mind, really two issues at the core, i.e., "normal PE" for "the market" and the idea of predicting a future number in some period of time for an index. I don't know whether a PE of 15 is the "norm" but I think it brings up a larger issue. That is, that anytime you slap a label on the market as a whole, you're averaging across a "market of stocks" in order to talk about "the stock market." If you believe that a stock's valuation is driven by earnings, interest rates and inflation, then that would imply that the "theoretical price" of an individual stock is driven independently from all others only by its earnings (interest rates and inflation being the same for all stocks). So if you were to look at secular trends in various industries, you could argue that there are always going to be industries, and therefore, stocks, that are going to do better than the market as a whole. Add to that the tendency to temporarily "misprice" stocks over some time period, and again you are left with many opportunities for some stocks to generate excess returns (or losses) vs "the market." In all, to assess how an individual equity is going to perform based on "normal PE for the market" won't be very helpful in generating portfolio returns. Along the same lines, I'd argue that to predict where a market index is going to end up in the future is even less useful. Could anybody have predicted how long the bubble was going to last or that a bubble was going to occur at all when it did? All that we know is that the market, driven by the actions of many individuals making independent decisions, has a "tendency" to act a certain way over time. But when and to what degree it does that is uncertain. Also, each period of time in market history is full of specific monetary and fiscal actions, changes in global economies and their interactions, natural Acts of God and a whole raft of other variables that make it really impossible to compare one "market" to another with any certainty. All said and done, predictions being interesting intellectual exercises, but useless to the individual making an investment decision based on their chosen style. All in all, a fancy way of saying that our job as investors is to "stick to our knitting." That is, to understand what makes CANSLIM work or not work and, under appropriate market conditions, to chose stocks that work within that framework. "M" is incidental in some sense, because it summarizes a change in the macroeconomic climate that companies are operating within from day to day. The value is in reading it for what it's worth--not where it's going to be at some point in time, but which direction it's headed. Katherine kmalm@earthlink.net - ----- Original Message ----- From: "rolf hertenstein" To: Sent: Saturday, November 10, 2001 7:42 AM Subject: [CANSLIM] M in 2002 > NBR's Market Monitor last night (Frank Cochrane of Investment Timing > Consultants) claims that based on the market P/E currently around 36 and > an historical market P/E of 15, he sees the DOW at 5500 and the NASD > 600-800 in 2002. That got me to wondering if: > 1. the market P/E is currently that high > 2. if market P/E = 15 is the norm > and especially got me wondering > 3. if the market *does* historically tend to correct to it's > 'normal' P/E > > I know WON isn't bothered by high P/Es for an individual CANSLIM > stock, but that assumes growth (C and A) and this market is not flush > with strong earnings growth stocks. So any comments on Cochrane's > assertions, even if his numbers are overdone? > > Cochrane also sees 2001 closing near lows for the year, a rally in > Q1 of 2002, the a steady decline. He didn't really say where he came > up with that forecast behavior. > > Rolf > > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. - - - -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, 10 Nov 2001 09:26:25 -0600 From: "Katherine Malm" Subject: Re: [CANSLIM] [Non-CANSLIM] Off topic - Budget Rent-A-Car This is a multi-part message in MIME format. - ------=_NextPart_000_01A9_01C169C9.C4FF6760 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Tom, Want to be sure I understand the question. You are wondering how they = can end up with a estimate current yearly EPS=3D($2.10) when, EPS for = Q1+Q2+Q3 =3D (.98) and an expectation of a good seasonal Q4? Katherine ----- Original Message -----=20 From: Tom Worley=20 To: CANSLIM=20 Sent: Saturday, November 10, 2001 8:00 AM Subject: [CANSLIM] [Non-CANSLIM] Off topic - Budget Rent-A-Car I am reposting this because I never got any response from the group. = Now that they have reported Q3 results, maybe someone smarter than me = can figure it out. With an RS of 6, EPS of 70, and a price of $1.03, = clearly NOT CANSLIM. Forecast for this year ending December: loss of $2.10 Results for first 3 qtrs (Q1 to Q3 order): Sales: $529.5MM / $577.6MM / $610.2MM Earnings: minus $2.37 / +$0.30 / +$1.12 (so they did as they said they = would, and earned more than the price of the stock) Adding up the 3 qtrs earnings, you get a loss of $0.95, which means = the forecast (unless it has not been updated yet) implies a Q4 loss of = $1.15. This goes against the positive comments I quoted below when the = company substantially raised the Q3 consensus forecast. If they simply = repeated Q3 in the 4th qtr, they should instead be profitable for the = full year. And the Q4 period includes Thanksgiving, Christmas and part = of New Year, all high travel seasons even now after the attacks on 9/11. = And regional car rentals was one thing they cited in raising the Q3 = forecast. If any members are familiar with the car rental industry, perhaps you = can point out what I am missing here. Tom Worley stkguru@netside.net AIM: TexWorley ----- Original Message -----=20 From: Tom Worley=20 To: CANSLIM=20 Sent: Monday, October 15, 2001 7:32 PM Subject: [CANSLIM] Off topic - Budget Rent-A-Car Anyone got time to figure out this anomaly?? Stock trades up 28 cents = today, to $1.33 (that's not a typo, over a 20% gain) on the news below = (earnings for the Q3 almost equal to the price of the stock)!!! And = business has improved since 9/11?? And it's got an RS of 8 and EPS of = 26? Budget Group (BD) announced it would exceed third quarter EPS = estimates. Consensus is .98 per share. The company stated it would post = at the low end of $1.12-1.24 per share. The diversification of our = business model -- airport and local market, car and truck rental -- = mitigates weakness in any one segment. Since September 11, local market = car rental transactions have been tracking above prior year and our = truck rental business remains on plan," stated Sandy Miller, chairman = and chief executive officer.=20 Tom Worley stkguru@netside.net AIM: TexWorley - ------=_NextPart_000_01A9_01C169C9.C4FF6760 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Tom,
 
Want to be sure I understand the = question. You are=20 wondering how they can end up with a estimate current yearly = EPS=3D($2.10) when,=20 EPS for Q1+Q2+Q3 =3D (.98) and an expectation of a good seasonal = Q4?
 
Katherine
----- Original Message -----
From:=20 Tom = Worley=20
To: CANSLIM
Sent: Saturday, November 10, = 2001 8:00=20 AM
Subject: [CANSLIM] = [Non-CANSLIM] Off=20 topic - Budget Rent-A-Car

I am reposting this because I never got any = response from=20 the group. Now that they have reported Q3 results, maybe someone = smarter than=20 me can figure it out. With an RS of 6, EPS of 70, and a price of = $1.03,=20 clearly NOT=20 CANSLIM.
 
Forecast for this year ending December: loss of=20 $2.10
Results for first 3 qtrs (Q1 to Q3 = order):
Sales: $529.5MM / $577.6MM / $610.2MM
Earnings: minus $2.37 / +$0.30 / +$1.12 (so they = did as they=20 said they would, and earned more than the price of the = stock)
 
Adding up the 3 qtrs earnings, you get a loss of = $0.95,=20 which means the forecast (unless it has not been updated yet) implies = a Q4=20 loss of $1.15. This goes against the positive comments I quoted below = when the=20 company substantially raised the Q3 consensus forecast. If they simply = repeated Q3 in the 4th qtr, they should instead be profitable for the = full=20 year. And the Q4 period includes Thanksgiving, Christmas and part of = New Year,=20 all high travel seasons even now after the attacks on 9/11. And = regional car=20 rentals was one thing they cited in raising the Q3 = forecast.
 
If any members are familiar with the car rental = industry,=20 perhaps you can point out what I am missing here.
 
Tom Worley
stkguru@netside.net
AIM:=20 TexWorley
----- Original Message -----=20
From: Tom = Worley=20
To: CANSLIM
Sent: Monday, October 15, 2001 7:32 PM
Subject: [CANSLIM] Off topic - Budget = Rent-A-Car

Anyone got time to figure out this anomaly?? Stock = trades up=20 28 cents today, to $1.33 (that's not a typo, over a 20% gain) on the = news=20 below (earnings for the Q3 almost equal to the price of the stock)!!! = And=20 business has improved since 9/11?? And it's got an RS of 8 and EPS of=20 26?
 
Budget Group (BD) = announced=20 it would exceed third quarter EPS estimates. Consensus is .98 per = share. The=20 company stated it would post at the low end of $1.12-1.24 per share. = The=20 diversification of our business model -- airport and local market, car = and=20 truck rental -- mitigates weakness in any one segment. Since September = 11,=20 local market car rental transactions have been tracking above prior = year and=20 our truck rental business remains on plan," stated Sandy Miller, = chairman and=20 chief executive officer.
 
Tom Worley
stkguru@netside.net
AIM:=20 TexWorley
- ------=_NextPart_000_01A9_01C169C9.C4FF6760-- - - - -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, 10 Nov 2001 08:37:52 -0700 From: esetser Subject: Re: [CANSLIM] Actually P/E Selling Rule Well, I think we have the rule interpretation slightly wrong. A reread of the rule shows this "Another selling rule you might consider is to simply sell when the price-to-earnings ratio of a stock increases 130% or more from the stock's P-E ratio at the time it originally began its big move." Eric paraphrased it to "increase TO 130%". Although this is a minor rewording, it makes a large difference in meaning. I read it as a 130% expansion of P/E, not a 30% increase. Now, to restate Tom's example, his stock P/E is sitting at 18 at purchase, you might want to look at selling it when the P/E hits 41.4. Big difference!! At 08:14 AM 11/10/01 -0500, you wrote: > Hi Eric, &P500 PE ratio, say at 40 or 50 or even higher, then I think >it is a good rule. But if it was sitting at 18, then this rule would never >persuade me to sell just because it moved up to a PE of 24. At the most, I >might consider that it is fully valued based on past results, but still >undervalued based on future expectations. Tom Worley >stkguru@netside.net >AIM: TexWorley > ----- Original Message ----- From: Tangen, Eric To: >'canslim@lists.xmission.com' Sent: Friday, November 09, 2001 6:01 PM > Subject: RE: [CANSLIM] TARO >My .02 cents: > >1. There is one other additional sell rule from WON based on fundamentals. >Its on page 117 of 24 Lessons: consider selling when the PE expands to 130% >of the PE when the stock broke out of its base. I'm paraphrasing here to >avoid a being served with papers ;) > > > - - - -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, 10 Nov 2001 09:43:22 -0600 From: "Katherine Malm" Subject: Re: [CANSLIM] Actually P/E Selling Rule So glad you pointed that out. I always looked at this rule as a "line of second defense." A clue that the P is getting ahead of itself when you've missed others such as a P moving too far away from trend or a blow off top where P goes crazy, etc. Just another way of locking in some profits before P regresses to the mean. Katherine - ----- Original Message ----- From: "esetser" To: Sent: Saturday, November 10, 2001 9:37 AM Subject: Re: [CANSLIM] Actually P/E Selling Rule > Well, I think we have the rule interpretation slightly wrong. A reread of > the rule shows this "Another selling rule you might consider is to simply > sell when the price-to-earnings ratio of a stock increases 130% or more > from the stock's P-E ratio at the time it originally began its big move." > Eric paraphrased it to "increase TO 130%". Although this is a minor > rewording, it makes a large difference in meaning. I read it as a 130% > expansion of P/E, not a 30% increase. > > Now, to restate Tom's example, his stock P/E is sitting at 18 at purchase, > you might want to look at selling it when the P/E hits 41.4. Big difference!! > > At 08:14 AM 11/10/01 -0500, you wrote: > > Hi Eric, &P500 PE ratio, say at 40 or 50 or even higher, then I think > >it is a good rule. But if it was sitting at 18, then this rule would never > >persuade me to sell just because it moved up to a PE of 24. At the most, I > >might consider that it is fully valued based on past results, but still > >undervalued based on future expectations. Tom Worley > >stkguru@netside.net > >AIM: TexWorley > > ----- Original Message ----- From: Tangen, Eric To: > >'canslim@lists.xmission.com' Sent: Friday, November 09, 2001 6:01 PM > > Subject: RE: [CANSLIM] TARO > >My .02 cents: > > > >1. There is one other additional sell rule from WON based on fundamentals. > >Its on page 117 of 24 Lessons: consider selling when the PE expands to > 130% > >of the PE when the stock broke out of its base. I'm paraphrasing here to > >avoid a being served with papers ;) > > > > > > > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. - - - -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, 10 Nov 2001 10:15:12 -0600 From: "Norman" Subject: Re: [CANSLIM] Actually P/E Selling Rule This is a multi-part message in MIME format. - ------=_NextPart_000_002F_01C169D0.954CB1B0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable A while back those 24 Rules appeared in the print edition. They can now = be accessed at the website. I could paraphrase them but maybe a direct = quote will not get me in too much trouble. So here goes: "Consider 50 of last year's biggest winners. [1999?] On average, their P-E ratio was 51 during the week they shot out of = bases en route to new highs. Perhaps that was a little pricey, but = investors were paying for performance. And these stocks delivered. On average they gained 330% from pivot to peak. At their highest levels, = they carried an average P-E ratio of 78. That means their P-E ratio expanded 121% on average during the course of = their run. Studies of the best stocks in past years have shown almost = exactly the same P-E growth. Use this 121% figure to help decide when your stock may be nearing the = end of its run. When a stock's P-E hits this point, look for other sell = signals based on the daily price and volume action." I'll just await the FedX delivery now :-) Norm - ----- Original Message -----=20 From: "Katherine Malm" To: Sent: Saturday, November 10, 2001 9:43 AM Subject: Re: [CANSLIM] Actually P/E Selling Rule > So glad you pointed that out. I always looked at this rule as a "line = of > second defense." A clue that the P is getting ahead of itself when = you've > missed others such as a P moving too far away from trend or a blow off = top > where P goes crazy, etc. Just another way of locking in some profits = before > P regresses to the mean. >=20 > Katherine >=20 >=20 > ----- Original Message ----- > From: "esetser" > To: > Sent: Saturday, November 10, 2001 9:37 AM > Subject: Re: [CANSLIM] Actually P/E Selling Rule >=20 >=20 > > Well, I think we have the rule interpretation slightly wrong. A = reread of > > the rule shows this "Another selling rule you might consider is to = simply > > sell when the price-to-earnings ratio of a stock increases 130% or = more > > from the stock's P-E ratio at the time it originally began its big = move." > > Eric paraphrased it to "increase TO 130%". Although this is a minor > > rewording, it makes a large difference in meaning. I read it as a = 130% > > expansion of P/E, not a 30% increase. > > > > Now, to restate Tom's example, his stock P/E is sitting at 18 at = purchase, > > you might want to look at selling it when the P/E hits 41.4. Big > difference!! > > > > At 08:14 AM 11/10/01 -0500, you wrote: > > > Hi Eric, &P500 PE ratio, say at 40 or 50 or even higher, then = I > think > > >it is a good rule. But if it was sitting at 18, then this rule = would > never > > >persuade me to sell just because it moved up to a PE of 24. At the = most, > I > > >might consider that it is fully valued based on past results, but = still > > >undervalued based on future expectations. Tom Worley > > >stkguru@netside.net > > >AIM: TexWorley > > > ----- Original Message ----- From: Tangen, Eric To: > > >'canslim@lists.xmission.com' Sent: Friday, November 09, 2001 = 6:01 > PM > > > Subject: RE: [CANSLIM] TARO > > >My .02 cents: > > > > > >1. There is one other additional sell rule from WON based on > fundamentals. > > >Its on page 117 of 24 Lessons: consider selling when the PE = expands to > > 130% > > >of the PE when the stock broke out of its base. I'm paraphrasing = here > to > > >avoid a being served with papers ;) > > > > > > > > > > > > > - > > -To subscribe/unsubscribe, email "majordomo@xmission.com" > > -In the email body, write "subscribe canslim" or > > -"unsubscribe canslim". Do not use quotes in your email. >=20 >=20 > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. >=20 >=20 - ------=_NextPart_000_002F_01C169D0.954CB1B0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
A while back those 24 Rules appeared in the print edition.  = They can=20 now be accessed at the website.  I could paraphrase them but maybe = a direct=20 quote will not get me in too much trouble.  So here goes:
 
"Consider 50 of last year's biggest winners.=20 [1999?]

On average, their P-E ratio was 51 during the = week they=20 shot out of bases en route to new highs. Perhaps that was a little = pricey, but=20 investors were paying for performance.

And these stocks delivered.

On average = they gained=20 330% from pivot to peak. At their highest levels, they carried an = average P-E=20 ratio of 78.

That means their P-E ratio expanded 121% on = average=20 during the course of their run. Studies of the best stocks in past years = have=20 shown almost exactly the same P-E growth.

Use this 121% figure to help decide when your = stock may=20 be nearing the end of its run. When a stock's P-E hits this point, look = for=20 other sell signals based on the daily price and volume = action."

I'll just await the FedX delivery now :-)

Norm

----- Original Message -----

From: "Katherine Malm" <kmalm@earthlink.net>
To: <canslim@lists.xmission.com= >
Sent: Saturday, November 10, 2001 9:43 AM
Subject: Re: [CANSLIM] Actually P/E Selling Rule

> So glad you pointed that out. I always looked at = this rule=20 as a "line of
> second defense." A clue that the P is getting = ahead of=20 itself when you've
> missed others such as a P moving too far away = from=20 trend or a blow off top
> where P goes crazy, etc. Just another = way of=20 locking in some profits before
> P regresses to the mean.
> =
>=20 Katherine
>
>
> ----- Original Message -----
> = From:=20 "esetser" <esetser@covad.net>
> To: = <canslim@lists.xmission.com= >
>=20 Sent: Saturday, November 10, 2001 9:37 AM
> Subject: Re: [CANSLIM] = Actually P/E Selling Rule
>
>
> > Well, I think = we have=20 the rule interpretation slightly wrong.  A reread of
> > = the rule=20 shows this "Another selling rule you might consider is to simply
> = >=20 sell when the price-to-earnings ratio of a stock increases 130% or = more
>=20 > from the stock's P-E ratio at the time it originally began its big=20 move."
> > Eric paraphrased it to "increase TO 130%".  = Although=20 this is a minor
> > rewording, it makes a large difference in=20 meaning.  I read it as a 130%
> > expansion of P/E, not a = 30%=20 increase.
> >
> > Now, to restate Tom's example, his = stock P/E=20 is sitting at 18 at purchase,
> > you might want to look at = selling it=20 when the P/E hits 41.4.  Big
> difference!!
> = >
> >=20 At 08:14 AM 11/10/01 -0500, you wrote:
> > >   Hi=20 Eric,   &P500 PE  ratio, say at 40 or 50 or even = higher, then=20 I
> think
> > >it is a good rule. But if it  was = sitting=20 at 18, then this rule would
> never
> > >persuade me = to sell=20 just because  it moved up to a PE of 24. At the most,
> = I
>=20 > >might consider that it is fully valued  based on past = results, but=20 still
> > >undervalued based on future =20 expectations.   Tom Worley
> >=20 >stkguru@netside.net
> > >AIM:  TexWorley
> = >=20 >    ----- Original Message -----   =20 From:    Tangen, Eric    To:
> >=20 >'canslim@lists.xmission.com'    Sent: Friday, = November 09,=20 2001 6:01
> PM
> > > Subject: RE: [CANSLIM] = TARO
> >=20 >My .02 cents:
> > >
> > >1. There is one = other=20 additional sell rule    from WON based on
>=20 fundamentals.
> > >Its on page 117 of 24 Lessons:=20 consider    selling when the PE expands to
> >=20 130%
> > >of the PE when the stock broke out = of   =20 its base. I'm paraphrasing here
> to
> > >avoid a = being served=20 with papers    ;)
> > >
> > = >
>=20 > >
> >
> > -
> > -To = subscribe/unsubscribe,=20 email "majordomo@xmission.com"
>= ; >=20 - -In the email body, write "subscribe canslim" or
> > = - -"unsubscribe=20 canslim".  Do not use quotes in your email.
>
> =
>=20 - -
> -To subscribe/unsubscribe, email "majordomo@xmission.com"
>= ; -In the=20 email body, write "subscribe canslim" or
> -"unsubscribe = canslim". =20 Do not use quotes in your email.
>
> - ------=_NextPart_000_002F_01C169D0.954CB1B0-- - - - -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, 10 Nov 2001 11:29:38 -0500 From: "Tom Worley" Subject: Re: [CANSLIM] [Non-CANSLIM] Off topic - Budget Rent-A-Car This is a multi-part message in MIME format. - ------=_NextPart_000_0183_01C169DA.FB9DE2E0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Kinda, Katherine. Actual results for nine months appear to contradict = both the forecast for full year, as well as the price and performance of = the stock. Either there is something terribly wrong with the 4th quarter = (confirming forecast and price / performance) or this is a severely = undervalued stock (if Management's rosy statement for Q3 continues into = Q4). Tom Worley stkguru@netside.net AIM: TexWorley ----- Original Message -----=20 From: Katherine Malm=20 To: canslim@lists.xmission.com=20 Sent: Saturday, November 10, 2001 10:26 AM Subject: Re: [CANSLIM] [Non-CANSLIM] Off topic - Budget Rent-A-Car Tom, =20 Want to be sure I understand the question. You are wondering how they = can end up with a estimate current yearly EPS=3D($2.10) when, EPS for = Q1+Q2+Q3 =3D (.98) and an expectation of a good seasonal Q4? =20 Katherine ----- Original Message -----=20 From: Tom Worley=20 To: CANSLIM=20 Sent: Saturday, November 10, 2001 8:00 AM Subject: [CANSLIM] [Non-CANSLIM] Off topic - Budget Rent-A-Car I am reposting this because I never got any response from the group. = Now that they have reported Q3 results, maybe someone smarter than me = can figure it out. With an RS of 6, EPS of 70, and a price of $1.03, = clearly NOT CANSLIM. Forecast for this year ending December: loss of $2.10 Results for first 3 qtrs (Q1 to Q3 order): Sales: $529.5MM / $577.6MM / $610.2MM Earnings: minus $2.37 / +$0.30 / +$1.12 (so they did as they said = they would, and earned more than the price of the stock) Adding up the 3 qtrs earnings, you get a loss of $0.95, which means = the forecast (unless it has not been updated yet) implies a Q4 loss of = $1.15. This goes against the positive comments I quoted below when the = company substantially raised the Q3 consensus forecast. If they simply = repeated Q3 in the 4th qtr, they should instead be profitable for the = full year. And the Q4 period includes Thanksgiving, Christmas and part = of New Year, all high travel seasons even now after the attacks on 9/11. = And regional car rentals was one thing they cited in raising the Q3 = forecast. If any members are familiar with the car rental industry, perhaps = you can point out what I am missing here. Tom Worley stkguru@netside.net AIM: TexWorley ----- Original Message -----=20 From: Tom Worley=20 To: CANSLIM=20 Sent: Monday, October 15, 2001 7:32 PM Subject: [CANSLIM] Off topic - Budget Rent-A-Car Anyone got time to figure out this anomaly?? Stock trades up 28 = cents today, to $1.33 (that's not a typo, over a 20% gain) on the news = below (earnings for the Q3 almost equal to the price of the stock)!!! = And business has improved since 9/11?? And it's got an RS of 8 and EPS = of 26? Budget Group (BD) announced it would exceed third quarter EPS = estimates. Consensus is .98 per share. The company stated it would post = at the low end of $1.12-1.24 per share. The diversification of our = business model -- airport and local market, car and truck rental -- = mitigates weakness in any one segment. Since September 11, local market = car rental transactions have been tracking above prior year and our = truck rental business remains on plan," stated Sandy Miller, chairman = and chief executive officer.=20 Tom Worley stkguru@netside.net AIM: TexWorley - ------=_NextPart_000_0183_01C169DA.FB9DE2E0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Kinda, Katherine. Actual results for nine months = appear to=20 contradict both the forecast for full year, as well as the price and = performance=20 of the stock. Either there is something terribly wrong with the 4th = quarter=20 (confirming forecast and price / performance) or this is a severely = undervalued=20 stock (if Management's rosy statement for Q3 continues into = Q4).
 
Tom Worley
stkguru@netside.net
AIM:=20 TexWorley
----- Original Message -----
From:=20 Katherine=20 Malm
To: canslim@lists.xmission.com =
Sent: Saturday, November 10, = 2001 10:26=20 AM
Subject: Re: [CANSLIM] = [Non-CANSLIM] Off=20 topic - Budget Rent-A-Car

Tom,
 
Want to be sure I understand the = question. You=20 are wondering how they can end up with a estimate current yearly = EPS=3D($2.10)=20 when, EPS for Q1+Q2+Q3 =3D (.98) and an expectation of a good seasonal = Q4?
 
Katherine
----- Original Message -----
From:=20 Tom=20 Worley
To: CANSLIM
Sent: Saturday, November 10, = 2001 8:00=20 AM
Subject: [CANSLIM] = [Non-CANSLIM] Off=20 topic - Budget Rent-A-Car

I am reposting this because I never got any = response from=20 the group. Now that they have reported Q3 results, maybe someone = smarter=20 than me can figure it out. With an RS of 6, EPS of 70, and a price = of $1.03,=20 clearly NOT=20 CANSLIM.
 
Forecast for this year ending December: loss of=20 $2.10
Results for first 3 qtrs (Q1 to Q3 = order):
Sales: $529.5MM / $577.6MM / = $610.2MM
Earnings: minus $2.37 / +$0.30 / +$1.12 (so they = did as=20 they said they would, and earned more than the price of the=20 stock)
 
Adding up the 3 qtrs earnings, you get a loss of = $0.95,=20 which means the forecast (unless it has not been updated yet) = implies a Q4=20 loss of $1.15. This goes against the positive comments I quoted = below when=20 the company substantially raised the Q3 consensus forecast. If they = simply=20 repeated Q3 in the 4th qtr, they should instead be profitable for = the full=20 year. And the Q4 period includes Thanksgiving, Christmas and part of = New=20 Year, all high travel seasons even now after the attacks on 9/11. = And=20 regional car rentals was one thing they cited in raising the Q3=20 forecast.
 
If any members are familiar with the car rental = industry,=20 perhaps you can point out what I am missing here.
 
Tom Worley
stkguru@netside.net
AIM:=20 TexWorley
----- Original Message -----=20
From: = Tom = Worley=20
To: CANSLIM
Sent: Monday, October 15, 2001 7:32 PM
Subject: [CANSLIM] Off topic - Budget = Rent-A-Car

Anyone got time to figure out this anomaly?? = Stock trades=20 up 28 cents today, to $1.33 (that's not a typo, over a 20% gain) on = the news=20 below (earnings for the Q3 almost equal to the price of the = stock)!!! And=20 business has improved since 9/11?? And it's got an RS of 8 and EPS = of=20 26?
 
Budget Group (BD)=20 announced it would exceed third quarter EPS estimates. Consensus is = .98 per=20 share. The company stated it would post at the low end of $1.12-1.24 = per=20 share. The diversification of our business model -- airport and = local=20 market, car and truck rental -- mitigates weakness in any one = segment. Since=20 September 11, local market car rental transactions have been = tracking above=20 prior year and our truck rental business remains on plan," stated = Sandy=20 Miller, chairman and chief executive officer.
 
Tom Worley
stkguru@netside.net
AIM:=20 TexWorley
- ------=_NextPart_000_0183_01C169DA.FB9DE2E0-- - - - -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 #1799 ****************************** 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.