RE: [CANSLIM] Earnings

From: "Fred Richards" <adrich@gte.net>
Subject: RE: [CANSLIM] Earnings
Date: Mon, 29 Apr 2002 07:44:13 -0500

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One of the reasons so many S&P 500 companies have beaten their earning
estimates is that they reduced them significantly in recent months.  The
real criteria is how are they performing versus the previous quarter last
year.

Fred

- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Ian
Sent: Monday, April 29, 2002 12:04 AM
To: canslim@lists.xmission.com
Subject: [CANSLIM] Earnings


Hi all:

I thought I would weigh in with one observation that arises from my personal
methodology: I start all of my daily mining by going through all the 'Ups'
earnings reports in IBD. I list the companies with strong revenue and EPS
growth in a little notebook of mine - filtering out most cyclicals, extreme
high historical valuations, and unusually low RS. For the last few quarters,
I have seen fairly slim picking. But in the last 2 weeks, the number of
entries in my book has swelled in comparison to both Q4 2001 and Q1 2001.

I also note that a full 80%+ of S&P 500 companies have beaten earnings
estimates this Q.

I have no idea what this will mean for either the mega-cap indexes , or the
micro/smallcaps that tend to inhabit my universe - but it tells me that
earnings, if not 'M', are unequivocally on the upswing.

As an off-topic aside, several years ago I read an interview with a
successful investor who has been in the US equity markets for decades. He
made the comment that he now times economic cycles based on the earnings of
EK - when Kodak's earnings start to tick up, then the economy is on the
upswing. I don't know if it is still relevant in the age of digital
photography, but I did find myself making a mental note last week when EK
came out with their pronouncement that Q1 2002 was their EPS bottom.


Finally, my universe of stocks finally took a hit Wed-Fri last week, (not
enough to lose all of the big gains of Mon-Tues, but it was the first sign
of panic selling since early February). I did end up lightening up a lot of
positions and raising cash - as it appears that even some of the strong
smallcaps are starting to be sucked into the selling.


Ian




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