Go to Jeff Salisbury LWGate Home Page.From: "Duke Miller" <dukemill@tampabay.rr.com>
Subject: RE: TOO (was:[CANSLIM] WebLinks)
Date: Thu, 16 May 2002 12:43:10 -0400
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Great summation, K....You've done it again!
Duke
- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com] On Behalf Of Katherine Malm
Sent: Thursday, May 16, 2002 12:29 PM
To: canslim@lists.xmission.com
Subject: Re: TOO (was:[CANSLIM] WebLinks)
Patrick,
You've been reading my mind!! Couldn't agree with you more. Since really
spending time getting to the heart of CANSLIM, I concluded that
technical strength combined with minimum growth characteristics and an
identifiable strategic advantage are the most important aspects. Here's
how I go about finding the candidates in more specific terms:
"Must Have"
=========
Minimum Technicals:
RS>=60 and <70 + RS rising--minimum starting point for watch list
RS>=70 (min at purchase)
Price >= -15% of 50dMA
Price >= 200 dMA
A/D = A, B, C (prefer A or B on purchase)
Minimum Fundamentals:
Forward growth rate >=15
Expected return based on Current Price, past profitability & EPS
estimates >= return on AAA bonds (this from VectorVest, RV>=1 and a
simple measure of risk/reward)
Cash Flow positive
"N" = identifiable strategic advantage that makes the stock and/or the
industry a "L"eader with fuel for future growth
The last two can't be easily filtered, so require due diligence. (Cash
flow is unreliable in stock screeners because you don't always know
whether they are using fiscal, trailing 12 months, prior reported year,
etc.)
Sound technical pattern on break out and/or pullback entry.
"Sorting/Elimination/Preference Criteria"
===========================
Operating Cash flow nearly equal to EPS (a quick way to identify
accounting red flags)
EPS and Revs growing (prefer >=20%, if a turnaround, at least 2 quarters
of growth)
ROE (prefer >=17%)
D/E (prefer <=50%)
% Institutional ownership (prefer 10-40%)
At least one other stock that is a direct competitor or is in the same
industry is also in similar technical shape (only exception is when the
company's product/market is so unique that there is no obvious publicly
traded competitor )
General industry strength (prefer the same RS requirements as with the
stock--This acts more as a "draw your eye to strength" indicator for the
above condition)
These last items I don't filter for, but the more of the minimums the
stock meets, the more "points" the stock gets. All else being equal in
the "must haves", this sorts the cream to the top of the list.
Katherine
- ----- Original Message -----
From: Patrick Wahl <mailto:pjwahl@attbi.com>
To: canslim@lists.xmission.com
Sent: Thursday, May 16, 2002 10:33 AM
Subject: RE: TOO (was:[CANSLIM] WebLinks)
It is a little hard sometimes, and as has been mentioned, most people
practice
some modified form of CANSLIM. I've tried to see what the underlying
idea is to
the whole thing, and I think it gets down to a few things that make
sense to me -
- -You want to time your buy so you get in when a stock is making a move,
and you
have a reasonable risk point if you are wrong.
- -You are looking for strong growth companies.
- -You are looking for something new, something that is a catalyst for
strong and
hopefully sustained growth in a company, like a new product, a new
industry (see
the internet, or the networking market of the early nineties as new
industries).
All the other stuff is somewhat peripheral, I think, guess there is room
for argument
there, but basically you want growth (a company executing well) and a
company in
a growing industry (the old expanding pie idea). I guess I like the
letters CANLM the
best.
On 16 May 2002 at 11:09, Duke Miller wrote:
> Thanks Patrick and Tom.
>
> I'm narrowing my MUST criteria more as time goes on. Got any darts
you
> want to sell me!?!?
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<DIV><SPAN class=3D655474216-16052002><FONT face=3DArial>Great =
summation,=20
K....You've done it again!</FONT></SPAN></DIV>
<DIV><SPAN class=3D655474216-16052002><FONT =
face=3DArial></FONT></SPAN> </DIV>
<DIV><SPAN class=3D655474216-16052002><FONT =
face=3DArial>Duke</FONT></SPAN></DIV>
<BLOCKQUOTE dir=3Dltr style=3D"MARGIN-RIGHT: 0px">
<DIV></DIV>
<DIV class=3DOutlookMessageHeader lang=3Den-us dir=3Dltr =
align=3Dleft><FONT=20
face=3DTahoma size=3D2>-----Original Message-----<BR><B>From:</B>=20
owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com]=20
<B>On Behalf Of </B>Katherine Malm<BR><B>Sent:</B> Thursday, May 16, =
2002=20
12:29 PM<BR><B>To:</B> canslim@lists.xmission.com<BR><B>Subject:</B> =
Re: TOO=20
(was:[CANSLIM] WebLinks)<BR><BR></FONT></DIV>
<DIV>Patrick,</DIV>
<DIV> </DIV>
<DIV>You've been reading my mind!! Couldn't agree with you more. Since =
really=20
spending time getting to the heart of CANSLIM, I concluded that =
technical=20
strength combined with minimum growth characteristics and an =
identifiable=20
strategic advantage are the most important aspects. Here's how I go =
about=20
finding the candidates in more specific terms:</DIV>
<DIV> </DIV>
<DIV>"Must Have"</DIV>
<DIV>=3D=3D=3D=3D=3D=3D=3D=3D=3D</DIV>
<DIV><EM>Minimum Technicals:</EM></DIV>
<DIV>RS>=3D60 and <70 + RS rising--minimum starting point for =
watch=20
list</DIV>
<DIV>RS>=3D70 (min at purchase)</DIV>
<DIV>Price >=3D -15% of 50dMA</DIV>
<DIV>Price >=3D 200 dMA</DIV>
<DIV>A/D =3D A, B, C (prefer A or B on purchase)</DIV>
<DIV><EM>Minimum Fundamentals:</EM></DIV>
<DIV>Forward growth rate >=3D15</DIV>
<DIV>Expected return based on Current Price, past profitability & =
EPS=20
estimates >=3D return on AAA bonds (this from VectorVest, =
RV>=3D1 and a=20
simple measure of risk/reward)</DIV>
<DIV>Cash Flow positive</DIV>
<DIV>"N" =3D identifiable strategic advantage that makes the stock =
and/or the=20
industry a "L"eader with fuel for future growth</DIV>
<DIV>The last two can't be easily filtered, so require due diligence. =
(Cash=20
flow is unreliable in stock screeners because you don't always know =
whether=20
they are using fiscal, trailing 12 months, prior reported year, =
etc.)</DIV>
<DIV>Sound technical pattern on break out and/or pullback entry.</DIV>
<DIV> </DIV>
<DIV>"Sorting/Elimination/Preference Criteria"</DIV>
=
<DIV>=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D</DIV>
<DIV>Operating Cash flow nearly equal to EPS (a quick way to identify=20
accounting red flags)</DIV>
<DIV>EPS and Revs growing (prefer >=3D20%, if a turnaround, at =
least 2=20
quarters of growth)</DIV>
<DIV>ROE (prefer >=3D17%)</DIV>
<DIV>D/E (prefer <=3D50%)</DIV>
<DIV>% Institutional ownership (prefer 10-40%)</DIV>
<DIV>At least one other stock that is a direct competitor or is in the =
same=20
industry is also in similar technical shape (only exception is when =
the=20
company's product/market is so unique that there is no obvious =
publicly traded=20
competitor )</DIV>
<DIV>General industry strength (prefer the same RS requirements as =
with the=20
stock--This acts more as a "draw your eye to strength" indicator for =
the above=20
condition)</DIV>
<DIV>These last items I don't filter for, but the more of the minimums =
the=20
stock meets, the more "points" the stock gets. All else being equal in =
the=20
"must haves", this sorts the cream to the top of the list.</DIV>
<DIV> </DIV>
<DIV>Katherine</DIV>
<BLOCKQUOTE=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A title=3Dpjwahl@attbi.com href=3D"mailto:pjwahl@attbi.com">Patrick =
Wahl</A>=20
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A =
title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
=20
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Thursday, May 16, 2002 =
10:33=20
AM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> RE: TOO =
(was:[CANSLIM]=20
WebLinks)</DIV>
<DIV><BR></DIV>It is a little hard sometimes, and as has been =
mentioned,=20
most people practice <BR>some modified form of CANSLIM. I've =
tried to=20
see what the underlying idea is to <BR>the whole thing, and I think =
it gets=20
down to a few things that make sense to me -<BR><BR>-You want to =
time your=20
buy so you get in when a stock is making a move, and you <BR>have a=20
reasonable risk point if you are wrong.<BR>-You are looking for =
strong=20
growth companies.<BR>-You are looking for something new, something =
that is a=20
catalyst for strong and <BR>hopefully sustained growth in a company, =
like a=20
new product, a new industry (see <BR>the internet, or the networking =
market=20
of the early nineties as new industries).<BR><BR>All the other stuff =
is=20
somewhat peripheral, I think, guess there is room for argument =
<BR>there,=20
but basically you want growth (a company executing well) and a =
company in=20
<BR>a growing industry (the old expanding pie idea). I guess I =
like=20
the letters CANLM the <BR>best.<BR><BR>On 16 May 2002 at 11:09, Duke =
Miller=20
wrote:<BR><BR>> Thanks Patrick and Tom.<BR>> <BR>> I'm =
narrowing my=20
MUST criteria more as time goes on. Got any darts you<BR>> =
want to=20
sell me!?!?<BR></BLOCKQUOTE></BLOCKQUOTE></BODY></HTML>
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