Re: [CANSLIM] Oskosh B'gosh gosha

From: esetser <esetser@covad.net>
Subject: Re: [CANSLIM] Oskosh B'gosh gosha
Date: Thu, 31 Jan 2002 18:29:31 -0800

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Sorry, Katherine, but your description of the DGO EPS isn't correct.  The
EPS rank description says the following:

"One of the five Investor's Business Daily SmartSelect=99 Corporate Ratings,
this is a proprietary formula that incorporates the percentage change in
the last two quarters' earnings versus the same quarters a year earlier,
the 5-year growth rate and the earnings stability. All components are
separately rated and weighted."

So EPS rank includes both long and short term growth rates, not just the 5
year rate. =20

Now having said that, I'm not sure I disagree with your conclusion.  I
think it is important to look at both factors independently and chose
stocks with the combination you prefer.  I find quite a few stocks with
good EPS ranks with so-so to bad recent quarters, and I immediately remove
these from my watch lists.

At 12:41 PM 1/31/02 -0600, you wrote:
>    Hi Steve,  The 37% growth rate is a 5 year rate of growth in  earnings.
>You can do a quick approximation by taking 1996  earnings  $0.66  *
>(1.37)^5 =3D 3.19 for current year   The  discrepancy between the high EPS
>Ranking and the lousy recent Q over Q actual  EPS numbers show the
>shortcoming of the EPS Ranking system. That is, based on 5  year earnings
>growth, the company has outperformed 89% of other stocks. But  recent
>quarters tell the tale more often than not.=20

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