Re: [CANSLIM] BRLI

From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] BRLI
Date: Thu, 28 Mar 2002 09:07:02 -0500

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John,

I have no idea which definition you use when you see a stock as a "penny
stock". During my early years as a stock broker, we considered anything
trading under $1.00 (e.g. actually quoted in pennies) as a penny stock.
Gradually over time the definition rose to anything under $5.00. I even had
one client that defined anything trading on NASDAQ as a penny stock (he
didn't like it when I pointed out various Naz listings like MSFT)!!

My personal choice for applying CANSLIM is low priced small and micro cap
stocks. I still apply CANSLIM principles, along with chart reading, TA,
news, etc. An example is DOCC, currently trading $7.42. However it has an RS
of 96 and an EPS of 84. Forecast for this year is a 57% growth in earnings,
with another 22% next year. Industry group is A, SMR is B. And I, and others
in the group with the experience and risk tolerance, can make money on
stocks like this while still applying most CANSLIM criteria.

I would also point out that this is not a terrible violation of WON
guidance, as I can find many stocks he includes in his DG books that are
trading at low prices, low volume, or low market cap. In fact, when I first
started using WON services well over a decade ago, most of his daily "picks"
were in the mid cap to small cap range.

I also recognize that micro or small cap stocks are neither mainstream
CANSLIM, nor suitable for most investors. They are more volatile, and
certainly higher risk, that bigger and more established companies. They are
often not followed by major analysts, if by any analyst at all (then again,
the anal ists didn't do real good on Enron, Global Crossings, etc). So I
rarely discuss my personal buys here, as they reflect my own personal
interpretation and application of CANSLIM. But you can bet when I do, I
don't consider them a "penny stock", but rather a largely undiscovered gem.

Price does not create value or opportunity, good business execution does
that.

Tom Worley
stkguru@bellsouth.net
AIM: TexWorley
- ----- Original Message -----
From: "John Hone" <jhone@comcast.net>
To: <canslim@lists.xmission.com>
Sent: Wednesday, March 27, 2002 7:37 PM
Subject: Re: [CANSLIM] BRLI


It's beyond my ken as to why so much of the mail in the Canslim board is
devoted to penny stocks and the like.  Why not take these non-canslim ideas
to a better board?


- ----- Original Message -----
From: "Ian" <ianstm@shaw.ca>
To: <canslim@lists.xmission.com>
Sent: Wednesday, March 27, 2002 12:12 PM
Subject: Re: [CANSLIM] BRLI


> A good example of an illiquid microcap (with just 4 million shares out),
> where the volume changes:
>
> Before:
> http://table.finance.yahoo.com/d?a=8&b=14&c=01&d=8&e=20&f=01&g=d&s=mtec
>
> After:
> http://finance.yahoo.com/q?s=mtec&d=t
>
> 10% of the outstanding shares in a day is almost unheard of, but it helps
> illustrate the point :)
>
>
> Ian
>
>
>
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