RE: [CANSLIM] SYK

From: "Duke Miller" <dukemill@tampabay.rr.com>
Subject: RE: [CANSLIM] SYK
Date: Wed, 20 Mar 2002 11:35:46 -0500
Next Article (by Subject): Re: [CANSLIM] SYK Chazmoore@aol.com
Previous Article (by Subject): RE: [CANSLIM] Forbes Magazine? "Duke Miller"
Next in Thread: Re: [CANSLIM] SYK Chazmoore@aol.com
Articles sorted by: [Date] [Author] [Subject]
This is a multi-part message in MIME format.

- ------=_NextPart_000_0014_01C1D003.60982EB0
Content-Type: text/plain;
	charset="US-ASCII"
Content-Transfer-Encoding: 7bit

Charley,

The results of your study would be very interesting to the group, I'm sure.

Duke
  -----Original Message-----
  From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Chazmoore@aol.com
  Sent: Wednesday, March 20, 2002 7:00 AM
  To: canslim@lists.xmission.com
  Subject: Re: [CANSLIM] SYK


  Tom: A few months ago one of the TV "bears" commented that a stock market
recovery could not occur until the P/E ratio's fell significantly. In other
words, stock prices are too high, or earnings too low. He noted that the S&P
500 Index P/E was (at the time) 28. Since I don't trust the S&P 500 Index
averages I started to research the P/E ratio of Industry Groups, as defined
by IBD. I am far from complete but my initial findings indicate that, with
the exception of the technology sector, average P/E's really are not that
high. Credit card companies like Capital One Finance (COF), and MBNA (KRB),
have an average P/E of about 22; 8 points below the current S/P Index
average.
  So, what is the point? I use this to determine if the stock P/E is in line
with it's own industry. It could also be used to determine a target price to
sell the stock in the future. While there are notable exceptions, (CSCO,
QCOM, JDSU), most stocks get downgraded when they hit P/E ratios
inconsistent with analyst projections, and this causes a price decline.
  (Maybe I have more time than sense.)

  Charley















- ------=_NextPart_000_0014_01C1D003.60982EB0
Content-Type: text/html;
	charset="US-ASCII"
Content-Transfer-Encoding: quoted-printable

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN">
<HTML><HEAD>
<META http-equiv=3DContent-Type content=3D"text/html; =
charset=3Dus-ascii">
<META content=3D"MSHTML 6.00.2713.1100" name=3DGENERATOR></HEAD>
<BODY>
<DIV><SPAN class=3D638063516-20032002><FONT=20
face=3DArial>Charley,</FONT></SPAN></DIV>
<DIV><SPAN class=3D638063516-20032002><FONT =
face=3DArial></FONT></SPAN>&nbsp;</DIV>
<DIV><SPAN class=3D638063516-20032002><FONT face=3DArial>The results of =
your study=20
would be very interesting to the group, I'm sure.</FONT></SPAN></DIV>
<DIV><SPAN class=3D638063516-20032002><FONT =
face=3DArial></FONT></SPAN>&nbsp;</DIV>
<DIV><SPAN class=3D638063516-20032002><FONT =
face=3DArial>Duke</FONT></SPAN></DIV>
<BLOCKQUOTE=20
style=3D"PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px =
solid">
  <DIV class=3DOutlookMessageHeader dir=3Dltr align=3Dleft><FONT =
face=3DTahoma=20
  size=3D2>-----Original Message-----<BR><B>From:</B>=20
  owner-canslim@lists.xmission.com=20
  [mailto:owner-canslim@lists.xmission.com]<B>On Behalf Of=20
  </B>Chazmoore@aol.com<BR><B>Sent:</B> Wednesday, March 20, 2002 7:00=20
  AM<BR><B>To:</B> canslim@lists.xmission.com<BR><B>Subject:</B> Re: =
[CANSLIM]=20
  SYK<BR><BR></FONT></DIV><FONT face=3Darial,helvetica><FONT =
size=3D2>Tom: A few=20
  months ago one of the TV "bears" commented that a stock market =
recovery could=20
  not occur until the P/E ratio's fell significantly. In other words, =
stock=20
  prices are too high, or earnings too low. He noted that the S&amp;P =
500 Index=20
  P/E was (at the time) 28. Since I don't trust the S&amp;P 500 Index =
averages I=20
  started to research the P/E ratio of Industry Groups, as defined by =
IBD. I am=20
  far from complete but my initial findings indicate that, with the =
exception of=20
  the technology sector, average P/E's really are not that high. Credit =
card=20
  companies like Capital One Finance (COF), and MBNA (KRB), have an =
average P/E=20
  of about 22; 8 points below the current S/P Index average. <BR>So, =
what is the=20
  point? I use this to determine if the stock P/E is in line with it's =
own=20
  industry. It could also be used to determine a target price to sell =
the stock=20
  in the future. While there are notable exceptions, (CSCO, QCOM, JDSU), =
most=20
  stocks get downgraded when they hit P/E ratios inconsistent with =
analyst=20
  projections, and this causes a price decline. <BR>(Maybe I have more =
time than=20
  sense.) <BR><BR>Charley=20
  =
<BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR></BLOCKQUOTE></FO=
NT></FONT></BODY></HTML>

- ------=_NextPart_000_0014_01C1D003.60982EB0--


- -
- -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.