RE: [CANSLIM] Current Case Study - XRAY

From: "Duke Miller" <dukemill@tampabay.rr.com>
Subject: RE: [CANSLIM] Current Case Study - XRAY
Date: Thu, 8 Aug 2002 23:07:35 -0400
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Hermann:

1.  Something superlative.
2.  People of the highest social level.

[French : cr=E8me, cream + de, of + la, the + cr=E8me, cream.]


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- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com] On Behalf Of Hermann Ertl
Sent: Thursday, August 08, 2002 9:20 PM
To: canslim@lists.xmission.com
Subject: RE: [CANSLIM] Current Case Study - XRAY


cr=E8me de la cr=E8me  -  would you please elaborate.



> From: "Duke Miller" <dukemill@tampabay.rr.com>
> To: <canslim@lists.xmission.com>
> Date: Thu, 8 Aug 2002 16:25:32 -0400
>
>    e  Mike:   When it comes to submitting  stocks for
> consideration, this has got to be, beyond a doubt, the cr=E8me de la
> cr=E8me!    =20
>
>         -----Original    Message-----
> From: owner-canslim@lists.xmission.com=20
> [mailto:owner-canslim@lists.xmission.com] On Behalf Of Mike Gibbons
> Sent: Thursday, August 08, 2002 3:27 PM
> To:    canslim@lists.xmission.com
> Subject: [CANSLIM] Current Case Study -    XRAY
>
>    In    view of the interest in current cases rather than 20-20
> hindsight,  and discussions to aid the    learning process,  I offer
> XRAY as an example, which    broke out today from a CwH pattern with
> short handle       Firstly, let me add the disclaimer that I'm a
> programmer who was introduced to CANSLIM as a development project,
> and I'm 1    year into the 3 yr learning curve, so further comment
> by the "experts" is    welcomed to improve my own
> understanding.       Firstly the fundamentals which are very strong,
> with the    exception that Institutional Ownership is already quite
> high. There are    differing views on what the level should be, but
> somewhere less than 30% would    be better. Additional DD would be
> required to determine why    pre-tax profit margins are decreasing
> and if that is cause for    concern. (This information is drawn from
> yahoo/multex not    IBD)     =20
> C                Current Earnings        >        Earnings per share
> growth of at least 25%          in the most recent quarter
> >
>
> Most recent quarter year on year growth.          (Published
> financial data).
>
>        35.00 %              >        Latest three quarters of sales
> growth          should be a minimum of 25%        >        Average
> year on year growth for last 3          quarters. (Published
> financial data).       51.00 %              >        Sales growth
> should be accelerating.                  >        Difference in year
> on year growth rates          over last 3 quarters. (Published
> financial data).        23.00             A                Strong
> Annual Earnings        Growth                Annual earnings growth
> for the last three          years of 25% or greater                3
> year compound EPS growth rate. (Published          financial
> data).       53.00 %                      Return on equity should be
> at least          17%                Published financial data.
> 21.00 %                     Pretax profit margins should
> be          increasing                Profit Margin for most recent
> quarter minus          profit margin 1 year ago. (Published
> financial data).       -1.00                   size=3D2>N
> >        New Products, Services or Leadership         >        If a
> company has a dynamic new product or          service, or is
> capitalizing on new conditions in the economy, this can
> have a dramatic impact on the price of a stock. Buy stocks just as
> they          emerge from a sound "base" pattern and make new price
> highs.                 Not Known       =20
> size=3D2>S                Supply and Demand                 Watch the
> demand for shares by looking at          the percentage change in
> volume for each of your stocks. Analyze a          stock's daily and
> weekly price and volume changes.                 The up/down volume
> ratio measures the ratio          of accumulation days to
> distribution days over the last 50          days.
> 0.90             L                Leading Stocks in Leading Industry
> Groups                          Nearly 50% of a stock's price action
> is a          result of its industry group's performance. Focus on
> the top industry          groups, and within those groups select
> stocks with the best price          performance.
> Multex Industry Rank ( 0 - 99 )
> (26 week          relative performance).
> 90
>
> Multex Rank within Industry ( 0 - 99 ).          Provided for
> informational purposes only.
> (4 week relative          performance)
>
>        22              >        The stock's Relative Price Strength
> Rating          should be in the 80s or 90s         >        We
> calculate RS daily by ranking all NYSE,          AMEX and NASDAQ
> stocks. Our RS algorithm is described          here. It correlates
> well with IBD's. Value.          Score pro-rated in range
> 60-79.       83             I                Institutional
> Sponsorship                You want at least a few of the
> better          performing mutual funds owning the stock. They're
> the ones who will          drive the stock up on a sustained
> basis.                Institutional Ownership. Value in range 5
> -          30% needed to score 1.       79.00
> %                      No. of Institutions. Provided for
> informational purposes only.       568
> size=3D2>M        >        Market Direction         >        You can
> buy the best stocks, but if the          general market is weak,
> most likely your stocks will be weak          also.
> Because Market Direction is not specific to          any one
> particular stock, we do not evaluate it on a per stock
> basis.               Look at the chart below. Note that the handle
> is only    3 days long. This is normally insufficient to have shaken
> out the potential    sellers and WON recommends that a handle should
> be at least 1-2 weeks long,    otherwise a breakout is prone to
> failure. Also the volume in the handle has    not dried up. This is
> often the case in the early days of handle formation and    we would
> like to see the volume decrease below the ADV and the price wedge
> downwards as the handle progresses.       Look at the volume coming
> up the right side of the    cup - consistently above the 50 ADV
> accompanied by big price positive price    movements, with only two
> days when the stock closed slightly down. It would    have been
> better if the volume had been below the ADV on those days, in
> which    case the stock would have earned a higher CQ (Chart
> Quality)    score.
>
>  Note the RS    line. This is quite high at 83, but has advanced
> only    slightly over the last few days despite significant    price
> gains in this stock. This indicates that other stocks are doing
> at    least as well.       The 50 day up/down volume    is at 0.90.
> Values less than 1 mean that the down volume days exceed the up volume

> days. However, the trend of the line is upwards, which is a
> positive    sign.        I'll go out on a limb and say my guess
> is    that todays breakout will not be sustained (although its
> holding now -    just) and it will continue to form a
> handle.           I conclude that this is one to watch but not to
> buy    right  now.                  Aloha,       Mike Gibbons
> Proactive Technologies,    LLC   http://www.proactech.com   size=3D2>=20



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