RE: [CANSLIM] Stock screening criteria for value stocks

From: "Katherine Malm" <kmalm@earthlink.net>
Subject: RE: [CANSLIM] Stock screening criteria for value stocks
Date: Wed, 5 Mar 2003 07:46:16 -0600
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Hi Sonnie,

I now more clearly see your intent. There's really 2 issues at hand. I've
used VectorVest since early '98, so first, in order to "mimic Vectorvest", I
am assuming that you are using their Value and Relative Value proprietary
rankings for selecting stocks such as FSTW and TALK. The bottom line is that
VV's "Value" is a discounted future earnings stream. While the exact
calculations are proprietary, an article that I wrote last year more fully
explains how, in general, these numbers are derived. (For those not familiar
with VV, the variable "GRT" to which I refer is forward earnings growth
rate.) See it at:

http://www.cwhcharts.com/katherine/RVLesson.zip (This is a zipped Word for
Windows document with imbedded graphics.)

Second, in a more general sense, a "value" investment approach can take many
forms. Buffett, for example, will use a discounted free cash flow model
similar to that described in my RV Lesson to compute "value", but that is
only one of many criteria that he uses. In order to compute this, you need
*forward* estimates and expectations of interest rates and it's very
difficult to get reliable estimates off a simple screening program such as
MSN, not to mention that this is a calculation that you would have to do
with raw data, not something that can be "screened." In lieu of or in
addition to that, you also need some meaningful measure of value relative to
price such as free cash flow to price, etc. MSN and other screening may get
you there, but the problem with doing a more thorough "value" analysis is
that you really need quite a few years of historical data on not only cash
flow, but also profit margins, earnings, ROE's, etc. to do something more
thorough. If you're looking for a package that gives you a lower priced
alternative to VV and the *only* thing you are trying to get from VV is
Value/Relative value, you might consider AAII's Stock Investor Pro software
which gives 7 or 8 years of historical fundamental data. This is data from
MarketGuide, but far more comprehensive than what you can get at the free
MarketGuide.com screening site. That said, you're *still* going to have to
use raw data to compute a discounted "value" similar to that in VV. (
http://www.aaii.com/store/sipro/) If on the other hand you also want
graphing, price/volume back data, investing tools, etc., that are also
available in VV, then SI Pro won't cover the bases.

Katherine

- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Sonnie Oratokhai
Sent: Tuesday, March 04, 2003 10:15 PM
To: canslim@lists.xmission.com
Subject: Re: [CANSLIM] Stock screening criteria for value stocks


Hi Tom, Katherine and Gene


Thanks for your response.  Actually what I am looking for is a criteria to
determine intrinsic value on the MSN screen.  Basically trying to mimic
vectorvest without paying for it.

Most of the stocks I have found using this method are usually unheard of.
Examples are FSTW and TALK

So if anyone know of ways of determing intrinsic value please share.

Thanks
Sonnie





>From: "Tom Worley" <stkguru@bellsouth.net>
>Reply-To: canslim@lists.xmission.com
>To: <canslim@lists.xmission.com>
>Subject: Re: [CANSLIM] Stock screening criteria for value stocks
>Date: Mon, 3 Mar 2003 23:05:56 -0500
>
>understood. In that case, one criteria if you are using it is market cap.
>Keep it low, as I find most good value with still good CANSLIM criteria are
>small caps and some mid caps. That also means keeping any screening
>criteria
>for ADV low (50,000 shares daily or even less). Also any lower price
>threshold for screening should be the lower teens or lower.
>
>Some of the best value is found in the unknown stocks, but that means being
>patient and waiting for them to be "discovered"
>
>----- Original Message -----
>From: "Sonnie Oratokhai" <sonnedo@hotmail.com>
>To: <canslim@lists.xmission.com>
>Sent: Monday, March 03, 2003 11:00 PM
>Subject: Re: [CANSLIM] Stock screening criteria for value stocks
>
>
>Yes I agree but das my tweak to canslim.  I dont pratice pure CANSLIM
>
>
>
>
>
>
>
> >From: "Tom Worley" <stkguru@bellsouth.net>
> >Reply-To: canslim@lists.xmission.com
> >To: <canslim@lists.xmission.com>
> >Subject: Re: [CANSLIM] Stock screening criteria for value stocks
> >Date: Mon, 3 Mar 2003 22:41:18 -0500
> >
> >other than CANSLIM and value stocks are contradictory terms?
> >
> >----- Original Message -----
> >From: "Sonnie Oratokhai" <sonnedo@hotmail.com>
> >To: <canslim@lists.xmission.com>
> >Sent: Monday, March 03, 2003 10:33 PM
> >Subject: [CANSLIM] Stock screening criteria for value stocks
> >
> >
> >I currently have a cnslim screen on MSN that I will like to tweak so I
>can
> >pick just value stocks.
> >
> >Any ideas?
> >
> >Thanks for your help
> >
> >Sonnie
> >
> >
> >
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