Re: [CANSLIM] Fundamental Analysis: P/S - I Love You (Sometimes)

From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] Fundamental Analysis: P/S - I Love You (Sometimes)
Date: Thu, 27 Mar 2003 10:35:13 -0500

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Gene, a p/s ratio of 1.0 or less is fine if you are looking for fallen =
angels, bottom fishing, value shopping, etc. But I don't see what that =
has to do with CANSLIM

Because expectations drive price, and thus high expectations would =
create a high p/s ratio, I am automatically suspicious whenever I find a =
stock hitting new highs, with great CANSLIM fundamentals, but a =
relatively low p/s ratio (generally under 2.0). It forces me to dig =
deeper to figure out why the price does not already reflect a higher =
premium.

- ----- Original Message -----=20
From: Gene Ricci=20
To: canslim@lists.xmission.com=20
Sent: Wednesday, March 26, 2003 8:50 PM
Subject: [CANSLIM] Fundamental Analysis: P/S - I Love You (Sometimes)


Appreciate comments on this article.

Gene



Fundamental Analysis: P/S - I Love You (Sometimes)
- ------------------------------------------------------------
Investors are always seeking ways to compare the value of stocks.=20
The price-to-sales ratio provides a simple approach: take the=20
company's market capitalization (the number of shares multiplied=20
by the share price) and divide it by the company's total sales=20
over the past twelve months. The lower the ratio, the more attractive=20
the investment. As easy as it sounds, price-to-sales provides=20
a useful measure for sizing up stocks. But investors need to=20
be mindful of the ratio's potential pitfalls and possible=20
unreliability.=20

Read this article at:
http://www.investopedia.com/articles/fundamental/03/032603.asp


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<DIV><FONT face=3DArial>Gene, a p/s ratio of 1.0 or less is fine if you =
are=20
looking for fallen angels, bottom fishing, value shopping, etc. But I =
don't see=20
what that has to do with CANSLIM</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>Because expectations drive price, and thus high=20
expectations would create a high p/s ratio, I am automatically =
suspicious=20
whenever I find a stock hitting new highs, with great CANSLIM =
fundamentals, but=20
a relatively low p/s ratio (generally under 2.0). It forces me to dig =
deeper to=20
figure out why the price does not already reflect a higher =
premium.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV style=3D"FONT: 10pt arial">----- Original Message -----=20
<DIV style=3D"BACKGROUND: #e4e4e4; font-color: black"><B>From:</B> <A=20
title=3Dgenr@swbell.net href=3D"mailto:genr@swbell.net">Gene Ricci</A> =
</DIV>
<DIV><B>To:</B> <A title=3Dcanslim@lists.xmission.com=20
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
 </DIV>
<DIV><B>Sent:</B> Wednesday, March 26, 2003 8:50 PM</DIV>
<DIV><B>Subject:</B> [CANSLIM] Fundamental Analysis: P/S - I Love You=20
(Sometimes)</DIV></DIV>
<DIV><BR></DIV>
<DIV><FONT face=3D"Comic Sans MS" size=3D4>Appreciate comments on this=20
article.</FONT></DIV>
<DIV><FONT face=3D"Comic Sans MS" size=3D4></FONT>&nbsp;</DIV>
<DIV><FONT face=3D"Comic Sans MS" size=3D4>Gene</FONT></DIV>
<DIV style=3D"FONT: 10pt arial">
<DIV><FONT face=3D"Comic Sans MS" size=3D4></FONT>&nbsp;</DIV></DIV>
<DIV><BR></DIV>
<DIV>Fundamental Analysis: P/S - I Love You=20
(Sometimes)<BR>----------------------------------------------------------=
- --<BR>Investors=20
are always seeking ways to compare the value of stocks. <BR>The =
price-to-sales=20
ratio provides a simple approach: take the <BR>company's market =
capitalization=20
(the number of shares multiplied <BR>by the share price) and divide it =
by the=20
company's total sales <BR>over the past twelve months. The lower the =
ratio, the=20
more attractive <BR>the investment. As easy as it sounds, price-to-sales =

provides <BR>a useful measure for sizing up stocks. But investors need =
to <BR>be=20
mindful of the ratio's potential pitfalls and possible =
<BR>unreliability.=20
<BR><BR>Read this article at:<BR><A=20
href=3D"http://www.investopedia.com/articles/fundamental/03/032603.asp">h=
ttp://www.investopedia.com/articles/fundamental/03/032603.asp</A><BR></DI=
V>
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BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px"><FONT=20
  face=3D"Comic Sans MS" =
size=3D4></FONT>&nbsp;</BLOCKQUOTE></BODY></HTML>

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