Re: [CANSLIM] --> CANSLI?

From: Dimitri Katsaros <dcka@yahoo.com>
Subject: Re: [CANSLIM] --> CANSLI?
Date: Tue, 9 Apr 2002 05:43:48 -0700 (PDT)

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Any opinions on NVR? It's been doing quite well for me
and I'd hate to "give back" any gains unneccisarily.

Thanks
Dimitri

- --- Katherine Malm <kmalm@earthlink.net> wrote:
> Hi John,
> 
> Homebuilding is a cyclical business by its nature.
> While the homebuilders have enjoyed a long boom in
> this cycle (more recently lengthened by the Fed's
> easing), its fairly clear that the cycle is nearing
> its end. That means that most of the homebuilders do
> not have what it takes to fuel future growth. When
> looking at any one stock in the group, its important
> to also check the remaining stocks and see what
> kinds of earnings and sales they've been printing in
> the last couple of quarters. Sure enough, most of
> the homebuilders have seen a marked deceleration in
> both. Under CANSLIM rules, 2 quarters of
> decelerating earnings after a long string of
> accelerating quarters is a sell signal. The next
> thing you'd want to look at is the technical health
> of all the players in the group. Pull up a chart of
> all the players and see what's there. Almost every
> one of them has formed a head and shoulders topping
> formation. While HOV and RYL appear to be bucking
> the trend, investing in them long at this point is
> the equivalent of playing with fire.
> 
> In sum, there are 3 things which qualify
> homebuilders as "stinky fish":
> (1) 2 quarters of decelerating earnings
> (2) cyclical business nearing the end of the cycle,
> higher interest rates pressuring sales and therefore
> taking away fuel for future growth
> (3) group health is poor, most stocks are topping
> out.
> 
> Katherine

=====
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