Re: [CANSLIM] PIR

From: Spencer48@aol.com
Subject: Re: [CANSLIM] PIR
Date: Thu, 3 Jan 2002 19:51:11 EST

Next Article (by Date): Re: [CANSLIM] Market "Dan Forant"
Previous Article (by Date): Re: [CANSLIM] where is "Katherine Malm"
Top of Thread: Re: [CANSLIM] PIR "Katherine Malm"
Next in Thread: Re: [CANSLIM] PIR "Mike Hofmann"
Articles sorted by: [Date] [Author] [Subject]

Mike:

     Just my 2=A2, but I wouldn't even consider PIR-and here's why:  The '02=
=20
$Annual Earnings don't look impressive, and neither does the sales increase,=
=20
nor do the last 4 quarters of earnings (two in fact were negative).=20
     As for the gap on the open-why is that such a good thing?  The open is=20
where emotional buying takes place (by retail investors, not the funds-ie.=20
smart money).  So why one should consider "gapping on the open" a selling=20
point, I have no idea.
     It did establish a new high (closing 8% higher), and it closed at the=20
top of its range on VERY high volume, which is a good thing.  But its RS lin=
e=20
(as seen in DG) did not make a new high.  This is one of WON's warning=20
signals to sell (and I imagine it would apply just as much to warn those awa=
y=20
from buying).  To me the lagging RS on very high volume indicates that PIR=20
has just made it climax run.
     As far as the heavy institutional buying: I like the way Andreas=20
analyzed DFXI (I believe that's the stock he looked at) by looking at how=20
many institutions were INCREASING their buying of the stock.  Just because=20
institutions are heavily into it doesn't mean too much to me.  It's like=20
looking at EPS and Sales-you want the numbers to be increasing.  According t=
o=20
the beta version of the DG weekly graph (just to the bottom right of where=20
the graph begins) the # of funds holding the stock is decreasing (in=20
quarterly order from the most recent in 12/01, the numbers are: 160, 166,=20
161, 162)
     Of course, I could be wrong on all this, but I really don't feel the=20
probability of PIR going much higher-after looking at the chart, and PIR's=20
fundamentals-is in your favor.

jans


In a message dated 1/3/2002 6:06:41 PM Eastern Standard Time,=20
sfmcanslim@hotmail.com writes:

<< Great action on PIR recently, especially today. Granted, specialty retail=
=20
may not be a particularly CANSLIMish industry, but here's what I've got on=20
it. Sure would appreciate commentary.
=20
 Today:
   a.. Gapped up at open
   b.. Established new high on extremely heavy volume (more than 5x ADV)
   c.. Ended day at upper end of day's trading range
   d.. Announced better than expected Dec sales and increased earnings=20
guidance for the quarter
   e.. Analysts are raving
 Fundies:
=20
 Very strong overall
=20
 Pros:
   a.. Heavy institutional buying in quarter ended 9/30/2001
   b.. EPS has held up in difficult economy (EPS up 9% in 3Q2001)
   c.. Cash flow + (big time)
   d.. Low debt and big improvement in this area the last two quarters
   e.. ROE just shy of WON's 17% criterion (16.6%), but is well above=20
industry avg (12.7%)
   f.. RSI has been holding in the 90s since early Oct
 Cons:
   a.. Annual earnings growth decreasing (5 yr =3D 54%, 3 yr =3D 10%, TTM=20=
=3D -2%)=20
... but TTM should improve if 4th Q comes in as expected
   b.. PEG may be a bit high (~1.4), but is in line with industry average=20
(1.5)
   c.. Insider ownership is poor at only 1.5% of outstanding shares and=20
insiders have been selling
   d.. Has been on a very good run; are we seeing a climax top? Today marked=
=20
by far the largest single day increase since the beginning of this run.
 Chart:
   a.. Broke out of cup w/o handle base formed by 12.65 high 9/4, 52-wk low=20
of 7.97 on 9/21 and gap up on strong volume 11/8. Also gapped up 11/26 &=20
12/18. That makes today's action the 4th b/o since early Nov. Could be tired=
,=20
but I like the divergence between price and RSI. Price is hitting new highs=20
while RSI has a little room to grow. Does it have enough steam to break=20
through the all-time high of around 20?
=20
 Support: Around 50-day EMA (14.72)
=20
 Resistance: Around all-time high established 2Q1998 (~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.

Go to Jeff Salisbury LWGate Home Page.