Re: [CANSLIM] Law Suits (was ACRT or MXT?)

From: "Norman" <theboyd@tisd.net>
Subject: Re: [CANSLIM] Law Suits (was ACRT or MXT?)
Date: Mon, 27 May 2002 18:26:36 -0500
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Thanks Tom and Katherine.  Public perception and financial resources to
fight law suits are certainly important items in my book.  I wonder how a
legitimate company gets it's money back after fighting off spurious class
action legal actions?  Seems a bit unfair to stock holders to have to eat
those financial burdens.  Life is tough :-)

norm
It's a dog-eat-dog world, and I'm wearing Milk Bone underwear (Norm of
Cheers)

- ----- Original Message -----
From: "Katherine Malm" <kmalm@earthlink.net>
To: <canslim@lists.xmission.com>
Sent: Monday, May 27, 2002 6:15 PM
Subject: Re: [CANSLIM] Law Suits (was ACRT or MXT?)


Hi Norm,

I don't know that there's a pat answer to your question. For example, I
owned shares in a local company, PVSW, quite some years ago. The stock price
was doing just grand and then went into a climax run at some point. CANSLIM
rules had me out, which didn't make me all that happy, because I rather
enjoyed asking tough questions at the shareholder's meetings. But the truth
of the matter was, there was trouble afoot that was evident in the
fundamentals and business strategy even before the stock technically took a
dive. The stock dropped from about 35 to zip in short order, followed by a
slew of class action law suits against the company. Frankly, they were
spurious. The company had done nothing to mislead the investors, as the
lawsuits charged, they just weren't doing a very good job minding the
business. In that case, the lawsuits were meaningless. The problem is, it
takes precious resources to defend against these lawsuits, so if nothing
else, it's money out of the coffers until things are settled. Add that to a
"poor perception" and you have a recipe for a stinky stock.

When reading the details of ACRT's lawsuit, it seems plausible that there's
something fishy in the works.  If you take a look at the fundamental summary
indicators, ACRT looks pretty grand, but WON always states that technicals
will tell the story long before the "reason" shows up in the fundamentals
and that's reason enough to stay away. All that in total is enough for me to
throw something like this in the stinky fish pile. Is there a probability
it'll all work out and the stock will climb back up? Yes. Is the probability
that it'll work out higher than for a stock with no red flags, better RS and
equivalent fundamental numbers? No.

Katherine
  ----- Original Message -----
  From: Norman
  To: canslim@lists.xmission.com
  Sent: Monday, May 27, 2002 5:53 PM
  Subject: Re: [CANSLIM] Law Suits (was ACRT or MXT?)


  Katherine,

  shed some light on that point for me.  I have seen many companies the
  subject of law suits in the past for exactly this type of thing:  making
  misleading or false statements during specific time periods, usually just
  before the stock price tanks.  It seems that this happened often after
March
  2000.  How can one tell if a law suit is significant/legitimate or just
  disgruntled stock holders?  Is it significant just because the legal
papers
  have been filed?  And, does that trouble extend until the legal action is
  dismissed?

  norm

  ----- Original Message -----
  From: "Katherine Malm" <kmalm@earthlink.net>
  To: <canslim@lists.xmission.com>
  Sent: Monday, May 27, 2002 5:14 PM
  Subject: Re: [CANSLIM] ACRT or MXT?


  Hi James & Tom,

  Not to mention things like this in the significant developments raise
enough
  red flags to stay away from something like ACRT:


http://yahoo.marketguide.com/MGI/news.asp?target=stocks%2Fcompanyinformation
  %2Fnews&Ticker=ACRT&TEXT=CMTX:20020412:102u4338

  I'm with Tom.....just get in the habit of ignoring stocks with an RS<60
and
  don't be tempted to bottom fish. Go to Investors.com and read articles on
  Fallen Angels and Falling Knives to get the gist.

  Katherine
    ----- Original Message -----
    From: Tom Worley
    To: canslim@lists.xmission.com
    Sent: Monday, May 27, 2002 4:53 PM
    Subject: Re: [CANSLIM] ACRT or MXT?


    H James,

    RS of 30 would keep ACRT off my list
    RS of 18 would also block MCSI
    RS of 9 on NYFX, goodbye
    RS of 14 on MXT - sorry, none would go beyond a first glance for me

    all have recent, and substantial, overhead due to the recent price
  declines.
    They will be fighting resistance all the way back up.

    ----- Original Message -----
    From: "James Wang" <jamesjw1@hotmail.com>
    To: <canslim@lists.xmission.com>
    Sent: Monday, May 27, 2002 5:29 PM
    Subject: [CANSLIM] ACRT or MXT?




    Hi, Just to learn recognizing potential winning
    stocks, by their both fundamantals and technical
    analysis.  I recently did some research on the following
    stocks, and find they could be great candidates for
    longs.  What do you think:

    ACRT: steady earings, low PE and low PEG, high short ratio.

    MCSI: good earings, good values.

    NYFX: should be great with economy's recovery.

    MXT: great potential with recovery, over 80% short in floats.  Great
  values.

    James

    _________________________________________________________________
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