Go to Jeff Salisbury LWGate Home Page.From: "Tim Fisher" <Tim@orerockon.com>
Subject: Re: [CANSLIM] SYK
Date: 20 Mar 2002 21:32:02 -0800
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HGS goes into great detail on P/E and how use use it as a gauge of how far a stock can run. Check Ian Woodward's site for tutorials. At 10:56 AM 3/20/2002 -0600, you wrote: >Hi Charley, > >WON's studies from 1953 to 1985 showed that the average trailing PE for >great growth stocks was 20. When they peaked, they averaged a trailing PE >of 45, 2.25 the original levels. They then screened the best stocks going >into the market peak in March 2000 and found that the average PE when they >broke out was 44.8. When they peaked, they averaged a PE of 99.6, >surprisingly, 2.2 times their PE on breakout. (Investor's Corner 6/9/00) >His conclusion is that this does give some range of expectation for PE >expansion during the stock's run. > >One way I like to evaluate the industry is to look at the current PEs >relative to 5 year highs and lows. 5 years is often enough to catch at >least one and in some cases, more than one economic/market cycle. And I >wholeheartedly agree with you that comparing forward and/or trailing PEs >of a stock relative to its industry/direct competitors is a great way to >see if expectations are already built into the current price. I also like >to compare the stock's ROE against others in the same industry, as it >gives a measure of their relative ability to generate return on capital >employed. > >It would be great to see the results from your study. > >Katherine Tim Fisher Ore-ROCK-On Rockhounding Web Site Owner, Fisher Fisheries, Ltd. mailto:tim@OreRockOn.com WWW http://OreRockOn.com - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email.
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