Re: [CANSLIM] EPS

From: "Katherine Malm" <kmalm@earthlink.net>
Subject: Re: [CANSLIM] EPS
Date: Mon, 28 Jan 2002 23:10:40 -0600
Previous Article (by Date): Re: [CANSLIM] EPS "Tom Worley"
Top of Thread: [CANSLIM] EPS "Scott Gettis"
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When the company buys back shares and turns them into treasury stock, =
they are considered issued but no longer outstanding. you can look in =
the 10Q to see the number of shares used in computing the EPS. Look in =
the balance sheet section to see a reconciliation of shares issued, =
outstanding, etc.

Here's an example from DOCC's latest 10Q found at =
http://www.sec.gov/Archives/edgar/data/1033864/000095013401509538/d92952e=
10-q.txt

Katherine

=3D=3D=3D=3D=3D
<!--StartFragment-->NOTE 3 - NET INCOME PER SHARE

The Company's basic and diluted net income per share are computed in =
accordance
with Statement of Financial Accounting Standards No. 128, "Earnings Per =
Share"
("SFAS 128"). Basic net income per share is computed using the weighted =
average
number of common shares outstanding. Diluted net income per share is =
computed
using the weighted average number of common shares outstanding and the =
assumed
exercise of stock options and warrants (using the treasury stock =
method). The
following is a reconciliation of the shares used in computing basic and =
diluted
net income per share for the periods indicated (in thousands):


<Table>
<Caption>
                                                                         =
 Three months ended
                                                                         =
     October 31,
                                                                    =
- -----------------------------
                                                                        =
2001             2000
                                                                    =
- -------------   -------------
<S>                                                                 <C>  =
           <C>
Shares used in computing basic net income per share                      =
  13,624          14,960

Dilutive effect of stock options and warrants                            =
     753             847
                                                                    =
- -------------   -------------

Shares used in computing diluted net income per share                    =
  14,377          15,807
                                                                    =
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D   =
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D

  ----- Original Message -----=20
  From: Scott Gettis=20
  To: canslim@lists.xmission.com=20
  Sent: Monday, January 28, 2002 10:58 PM
  Subject: [CANSLIM] EPS


  when a company buys back shares, does the number of outstanding shares =
decrease?  If so, then it is possible for a company to show earnings =
growth due to the fact that there are less shares outstanding.  Thus the =
companys earnings are not really growing.

  =20
   -----Original Message-----
  From: owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Katherine Malm
  Sent: Monday, January 28, 2002 8:52 PM
  To: canslim@lists.xmission.com
  Subject: Re: [CANSLIM] docc


    Hi Scott,

    The rest of the 41% not owned by management  is owned by SFE, an =
"incubator" that has a portfolio of  companies in which it maintains a =
substantial portion of the outstanding shares. See =
http://www.safeguard.com/investorfs.html for a list. You see this kind =
of discrepancy in the numbers quite often when a stock is spun off from =
a parent or from an incubator and not all shares are distributed to the =
public in the spin off.

    Katherine
      ----- Original Message -----=20
      From: Scott Gettis=20
      To: canslim@lists.xmission.com=20
      Sent: Monday, January 28, 2002 10:30 PM
      Subject: [CANSLIM] docc



      dgo list the management ownership as 18%.
      however the (1 - float/total share outstanding)* 100 =3D 41% ?=20

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<DIV>When the company buys back shares and turns them into treasury =
stock, they=20
are considered issued but no longer outstanding. you can look in the 10Q =
to see=20
the number of shares used in computing the EPS. Look in the balance =
sheet=20
section to see a reconciliation of shares issued, outstanding, =
etc.</DIV>
<DIV>&nbsp;</DIV>
<DIV>Here's an example from DOCC's latest 10Q found at <A=20
href=3D"http://www.sec.gov/Archives/edgar/data/1033864/000095013401509538=
/d92952e10-q.txt">http://www.sec.gov/Archives/edgar/data/1033864/00009501=
3401509538/d92952e10-q.txt</A></DIV>
<DIV>&nbsp;</DIV>
<DIV>Katherine</DIV>
<DIV>&nbsp;</DIV>
<DIV>=3D=3D=3D=3D=3D</DIV>
<DIV>&lt;!--StartFragment--&gt;NOTE 3 - NET INCOME PER SHARE<BR><BR>The=20
Company's basic and diluted net income per share are computed in=20
accordance<BR>with Statement of Financial Accounting Standards No. 128,=20
"Earnings Per Share"<BR>("SFAS 128"). Basic net income per share is =
computed=20
using the weighted average<BR>number of common shares outstanding. =
Diluted net=20
income per share is computed<BR>using the weighted average number of =
common=20
shares outstanding and the assumed<BR>exercise of stock options and =
warrants=20
(using the treasury stock method). The<BR>following is a reconciliation =
of the=20
shares used in computing basic and diluted<BR>net income per share for =
the=20
periods indicated (in=20
thousands):<BR><BR><BR>&lt;Table&gt;<BR>&lt;Caption&gt;<BR>&nbsp;&nbsp;&n=
bsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nb=
sp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbs=
p;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp=
;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;=
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&=
nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;=20
Three months=20
ended<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbs=
p;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp=
;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;=
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&=
nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&n=
bsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nb=
sp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;=20
October=20
31,<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;=
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&=
nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&n=
bsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nb=
sp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbs=
p;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;=20
- -----------------------------<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbs=
p;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp=
;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;=
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&=
nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&n=
bsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nb=
sp;&nbsp;&nbsp;&nbsp;=20
2001&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nb=
sp;=20
2000<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp=
;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;=
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&=
nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&n=
bsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nb=
sp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;=20
- -------------&nbsp;&nbsp;=20
- -------------<BR>&lt;S&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp=
;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;=
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&=
nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&n=
bsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nb=
sp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;=20
&lt;C&gt;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbs=
p;&nbsp;=20
&lt;C&gt;<BR>Shares used in computing basic net income per=20
share&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&n=
bsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;=20
13,624&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;=20
14,960<BR><BR>Dilutive effect of stock options and=20
warrants&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp=
;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;=
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;=20
753&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbs=
p;=20
847<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;=
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&=
nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&n=
bsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nb=
sp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbs=
p;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;=20
- -------------&nbsp;&nbsp; -------------<BR><BR>Shares used in computing =
diluted=20
net income per=20
share&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&n=
bsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;=20
14,377&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;=20
15,807<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nb=
sp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbs=
p;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp=
;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;=
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&=
nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;=20
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D&nbsp;&nbsp; =
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D<BR></DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
  <DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV>
  <DIV=20
  style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
  <A title=3Dsgettis@ucla.edu href=3D"mailto:sgettis@ucla.edu">Scott =
Gettis</A>=20
  </DIV>
  <DIV style=3D"FONT: 10pt arial"><B>To:</B> <A =
title=3Dcanslim@lists.xmission.com=20
  =
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
 </DIV>
  <DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Monday, January 28, 2002 =
10:58=20
  PM</DIV>
  <DIV style=3D"FONT: 10pt arial"><B>Subject:</B> [CANSLIM] EPS</DIV>
  <DIV><BR></DIV>
  <DIV><SPAN class=3D764045604-29012002><FONT face=3DArial =
color=3D#0000ff size=3D2>when=20
  a company buys back shares, does the number of outstanding shares=20
  decrease?&nbsp; If so, then it is possible for a company to show =
earnings=20
  growth due to the fact that there are less shares outstanding.&nbsp; =
Thus the=20
  companys earnings are not really growing.</FONT></SPAN></DIV><SPAN=20
  class=3D764045604-29012002></SPAN><FONT face=3DTahoma>
  <DIV><BR><FONT size=3D2><SPAN=20
class=3D764045604-29012002></SPAN></FONT>&nbsp;</DIV>
  <DIV><FONT size=3D2><SPAN =
class=3D764045604-29012002>&nbsp;</SPAN>-----Original=20
  Message-----<BR><B>From:</B> <A=20
  =
href=3D"mailto:owner-canslim@lists.xmission.com">owner-canslim@lists.xmis=
sion.com</A>=20
  [mailto:owner-canslim@lists.xmission.com]<B>On Behalf Of </B>Katherine =

  Malm<BR><B>Sent:</B> Monday, January 28, 2002 8:52 PM<BR><B>To:</B>=20
  canslim@lists.xmission.com<BR><B>Subject:</B> Re: [CANSLIM]=20
  docc<BR><BR></DIV></FONT></FONT>
  <BLOCKQUOTE dir=3Dltr style=3D"MARGIN-RIGHT: 0px">
    <DIV>Hi Scott,</DIV>
    <DIV>&nbsp;</DIV>
    <DIV>The rest of the 41% not owned by&nbsp;management &nbsp;is owned =
by SFE,=20
    an "incubator" that has a portfolio of&nbsp; companies in which it =
maintains=20
    a substantial portion of the outstanding shares. See <A=20
    =
href=3D"http://www.safeguard.com/investorfs.html">http://www.safeguard.co=
m/investorfs.html</A>&nbsp;for=20
    a list. You see this kind of discrepancy in the numbers quite often =
when a=20
    stock is spun off from a parent or from an incubator and not all =
shares are=20
    distributed to the public in the spin off.</DIV>
    <DIV>&nbsp;</DIV>
    <DIV>Katherine</DIV>
    <BLOCKQUOTE=20
    style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
      <DIV style=3D"FONT: 10pt arial">----- Original Message ----- =
</DIV>
      <DIV=20
      style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
      <A title=3Dsgettis@ucla.edu href=3D"mailto:sgettis@ucla.edu">Scott =
Gettis</A>=20
      </DIV>
      <DIV style=3D"FONT: 10pt arial"><B>To:</B> <A=20
      title=3Dcanslim@lists.xmission.com=20
      =
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
=20
      </DIV>
      <DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Monday, January 28, =
2002 10:30=20
      PM</DIV>
      <DIV style=3D"FONT: 10pt arial"><B>Subject:</B> [CANSLIM] =
docc</DIV>
      <DIV><BR></DIV><BR>dgo list the management ownership as =
18%.<BR>however=20
      the (1 - float/total share outstanding)* 100 =3D 41% ? =
<BR><BR>-<BR>-To=20
      subscribe/unsubscribe, email "<A=20
      =
href=3D"mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>-In=
=20
      the email body, write "subscribe canslim" or<BR>-"unsubscribe=20
      canslim".&nbsp; Do not use quotes in your=20
email.</BLOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE></BODY></HTML>

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Previous Article (by Date): Re: [CANSLIM] EPS "Tom Worley"
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