Go to Jeff Salisbury LWGate Home Page.From: Eric Jaenike <ericjaenike@yahoo.com>
Subject: Re: [CANSLIM] --> CANSLI?
Date: Tue, 9 Apr 2002 07:36:21 -0700 (PDT)
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- --0-783671478-1018362981=:63472 Content-Type: text/plain; charset=us-ascii I agree with Katherine wholeheartedly, and would add: 1. Historically, homebuilders peak at the 9x EPS/ 2x book value range (varies by company). That's where they are now. 2. I know of at least one top hedge fund that has just started a short position in them (take if for what it's worth, but they are very good). 3. KB Homes reported a 1.5% decrease in home sales. 4. New home numbers have probably been helped recently by unseasonably warm weather, making them appear better than they otherwise would be. 5. Last week's move was probably in reaction to reduced interest rate expectations. 6. There is a derth of quality, leading industry groups to choose from. They might be attracting money that would normally be invested elsewhere. Eric Katherine Malm <kmalm@earthlink.net> wrote: At the very least, I'd trail a stop on this one. Action during March showed sell signals (distribution and tails down on high volume, large volume up days with little progress). Yesterday the stock made a new high on lower volume. I'd also be watching for signs that it's started building steam for a climax run to the top. Katherine----- Original Message ----- From: Dimitri Katsaros To: canslim@lists.xmission.com Sent: Tuesday, April 09, 2002 7:43 AMSubject: Re: [CANSLIM] --> CANSLI? 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 ===== Quiquid latine dictum sit altum viditur __________________________________________________ Do You Yahoo!? Yahoo! Tax Center - online filing with TurboTax http://taxes.yahoo.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. - --------------------------------- Do You Yahoo!? Yahoo! Tax Center - online filing with TurboTax - --0-783671478-1018362981=:63472 Content-Type: text/html; charset=us-ascii <P> I agree with Katherine wholeheartedly, and would add: 1. Historically, homebuilders peak at the 9x EPS/ 2x book value range (varies by company). That's where they are now. 2. I know of at least one top hedge fund that has just started a short position in them (take if for what it's worth, but they are very good). 3. KB Homes reported a 1.5% decrease in home sales. 4. New home numbers have probably been helped recently by unseasonably warm weather, making them appear better than they otherwise would be. 5. Last week's move was probably in reaction to reduced interest rate expectations. 6. There is a derth of quality, leading industry groups to choose from. They might be attracting money that would normally be invested elsewhere. <P>Eric <P> <B><I>Katherine Malm <kmalm@earthlink.net></I></B> wrote: <BLOCKQUOTE style="PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #1010ff 2px solid"> <META content="MSHTML 6.00.2600.0" name=GENERATOR> <STYLE></STYLE> <DIV>At the very least, I'd trail a stop on this one. Action during March showed sell signals (distribution and tails down on high volume, large volume up days with little progress). Yesterday the stock made a new high on lower volume. I'd also be watching for signs that it's started building steam for a climax run to the top.</DIV> <DIV> </DIV> <DIV>Katherine</DIV> <BLOCKQUOTE style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px"> <DIV style="FONT: 10pt arial">----- Original Message ----- </DIV> <DIV style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><B>From:</B> <A title=dcka@yahoo.com href="mailto:dcka@yahoo.com">Dimitri Katsaros</A> </DIV> <DIV style="FONT: 10pt arial"><B>To:</B> <A title=canslim@lists.xmission.com href="mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A> </DIV> <DIV style="FONT: 10pt arial"><B>Sent:</B> Tuesday, April 09, 2002 7:43 AM</DIV> <DIV style="FONT: 10pt arial"><B>Subject:</B> Re: [CANSLIM] --> CANSLI?</DIV> <DIV><BR></DIV>Any opinions on NVR? It's been doing quite well for me<BR>and I'd hate to "give back" any gains unneccisarily.<BR><BR>Thanks<BR>Dimitri<BR><BR>--- Katherine Malm <<A href="mailto:kmalm@earthlink.net">kmalm@earthlink.net</A>> wrote:<BR>> Hi John,<BR>> <BR>> Homebuilding is a cyclical business by its nature.<BR>> While the homebuilders have enjoyed a long boom in<BR>> this cycle (more recently lengthened by the Fed's<BR>> easing), its fairly clear that the cycle is nearing<BR>> its end. That means that most of the homebuilders do<BR>> not have what it takes to fuel future growth. When<BR>> looking at any one stock in the group, its important<BR>> to also check the remaining stocks and see what<BR>> kinds of earnings and sales they've been printing in<BR>> the last couple of quarters. Sure enough, most of<BR>> the homebuilders have seen a marked deceleration in<BR>> both. Under CANSLIM rules, 2 quarters of<BR>> decelerating earnings after a long string of<BR>> accelerating quarters is a sell signal. The next<BR>> thing you'd want to look at is the technical health<BR>> of all the players in the group. Pull up a chart of<BR>> all the players and see what's there. Almost every<BR>> one of them has formed a head and shoulders topping<BR>> formation. While HOV and RYL appear to be bucking<BR>> the trend, investing in them long at this point is<BR>> the equivalent of playing with fire.<BR>> <BR>> In sum, there are 3 things which qualify<BR>> homebuilders as "stinky fish":<BR>> (1) 2 quarters of decelerating earnings<BR>> (2) cyclical business nearing the end of the cycle,<BR>> higher interest rates pressuring sales and therefore<BR>> taking away fuel for future growth<BR>> (3) group health is poor, most stocks are topping<BR>> out.<BR>> <BR>> Katherine<BR><BR>=====<BR>Quiquid latine dictum sit altum viditur<BR><BR>__________________________________________________<BR>Do You Yahoo!?<BR>Yahoo! Tax Center - online filing with TurboTax<BR><A href="http://taxes.yahoo.com/">http://taxes.yahoo.com/</A><BR><BR>-<BR>-To subscribe/unsubscribe, email "<A href="mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>-In the email body, write "subscribe canslim" or<BR>-"unsubscribe canslim". Do not use quotes in your email.</BLOCKQUOTE></BLOCKQUOTE><p><br><hr size=1><b>Do You Yahoo!?</b><br> <a href="$rd_url/welcome/?http://taxes.yahoo.com/">Yahoo! Tax Center</a> - online filing with TurboTax - --0-783671478-1018362981=:63472-- - - - -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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