Re: [CANSLIM] Health of the small cap growth sector

From: "Donald Wallker" <dougald@dmv.com>
Subject: Re: [CANSLIM] Health of the small cap growth sector
Date: Sun, 28 Jul 2002 12:12:37 -0400

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- ----- Original Message -----
From: "Tom Worley" <stkguru@bellsouth.net>
To: "CANSLIM" <canslim@lists.xmission.com>
Sent: Sunday, July 28, 2002 10:15 AM
Subject: [CANSLIM] Health of the small cap growth sector

> With some time on my hands this weekend and so few stocks worth looking
at,
> I decided to expand my normal review of stocks in my VR (Virtual Reality)
> Fund. Since we are well into the quarterly earnings reporting, I wanted to
> assess which ones had reported, and the quality and direction of the
> results, more than looking at how the chart looked. Basically, a drop back
> to more emphasis on fundamentals. I used my VR Fund rather than what I
own,
> or indexes, as it gave me a broader review of stocks with expected strong
> growth.
>
> In all, I was looking at 42 different stocks, mostly under $500 million
> market capitalization. Most I already hold in the Fund, several of which
> have not yet been purchased but are being monitored, or I missed an
initial
> entry point and am waiting to see if I can find an appropriate (tho
higher)
> entry.
>
> Of the 42, 18 have reported for the period ending 6/30/02, and of these 14
> were up year over year, and most were also up sequentially. Three were
down
> either sequentially or year over year, or both. One was flat sequentially,
> but still up strong year over year. Of the remainder, 19 have yet to
report,
> and the remaining 5 are on a non-standard fiscal year with the quarter
> ending other than 6/30/02.
>
> Of the 19 yet to report, I sold one last week (naturally it immediately
> spiked 35%) for a loss, and dropped another from watching because of its
> fall in the past week. Very few of the 42 have good charts right now,
altho
> several were forming long consolidation patterns. I am encouraged,
however,
> with the earnings results, and continue to believe that fundamentals will
> win out in the long term. I suspect a similar review of mid cap, and
higher
> priced, stocks would show similar results.
>
> "M" is clearly still saying to remain in cash for now. CANSLIM says to
take
> this time to find the future leaders, and be ready for when they emerge
into
> a more favorable market. This review confirmed my belief that, at least in
> the small cap growth sector, earnings are improving, fundamentals are
> intact, and in time "M" will begin to reflect this. Although the market
did
> look healthier last week, there is still not conclusive evidence that a
> bottom has been reached. More and more, though, it is looking to me like
> this will be a bottom reached without screaming evidence of capitulation.
>
> Good luck to all,
>
> Tom Worley
> stkguru@bellsouth.net
> AIM: TexWorley
>
>
>
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