Re: [CANSLIM] "M" - the trend

From: Ian <ianstm@shaw.ca>
Subject: Re: [CANSLIM] "M" - the trend
Date: Wed, 23 Apr 2003 14:42:45 -0700
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Hi all:

I'll add a couple of more 'M' trends - strictly personal observations:

1. Revenues are weak this quarter, in spite of generally solid earnings. I
use daily IBD earnings reports as the basis of assembling a stock universe,
and one of my key criterias is 20%+ revenue growth. I am finding fewer
qualified candidates this quarter than I have in a long time, in spite of
the abundance of great EPS growth.

2. The nanocap and microcap CANSLIM candidates that I follow really seem to
be the flavour du jour of this market. I have seen many huge runs over the
last 6 weeks.

3. IBD's own recent publication of the 'IBD 100' confirms my personal belief
that WON"s volume and price minimums are arbitrary, and in fact are an
obstacle to low-risk market-beating returns. The IBD 100 is chock full of
stocks that started showing great revenue and EPS growth while the share
price was still in the single digits, and ADV was low.

Some examples of stocks that first made my personal radar screen as
single-digit midgets over the past few years (I'd wager that many of the
other issues that I do not follow, started from similar humble beginnings):

(The Number is IBD's ranking in the IBD 100)

1. HITK - Was a nanocap when great earnings started hitting in the spring of
'01. Volume was non-existant. The most recent 400% surge started last
September as HITK saw a quantum gap up in ADV.
4. SSYS - Was a low single digit 'invisible' stock just 6 months ago.
9. TARO - I believe it was $8 pre-split, when I first noticed their great
earnings in the summer of 2000
11. BCGI - was in the sinlge digits just last fall.
12. GSOF - a $7 no-volume stock when it broke out last September on great
EPS growth.
20. QSII - I remember trading it from $10 in the summer of '01
21. CEDC - Tom can attest to the fact that I sent him an email in real-time
when it broke out on volume at $5.20 in July '01. CEDC was so illiquid at
the time that I would have risk being laughed off of the list just for
bringing it up.
29. JOSB - Nifty little clothier had a qunatum volume jump early last year
when it was at $8
85. USNA - A dubious industry kept me away - but great earnings kick-started
volume from just $2 early last year. I'm still kicking myself on this one,
as I was watching the ticker as it jumped to $3 in a heartbeat. It exhibited
the same kind of tremendous ' never look back' characterstic that WON always
expects from winners - even from $2!
88. JCOM - The quantum change in volume hit just 1 year ago, at $7.


Cheers,

Ian

- ----- Original Message -----
From: Tom Worley <stkguru@bellsouth.net>
To: CANSLIM <canslim@lists.xmission.com>
Sent: Tuesday, April 22, 2003 8:05 PM
Subject: [CANSLIM] "M" - the trend


> worth noting that virtually every index still looks alike, but now are all
> in a several week uptrend. In each case, they moved above on today's
> trading, on above average volume, both of the recent high spikes of 3/21
and
> 4/7, and are approaching the calendar year highs set back in mid January.
>
> RS lines are trending up, as are the 50 dma. The 200 dma appears to be
> bottoming, a continuation of the short term trend will also have this line
> trending up. The increase in trading volume is likewise significant to me,
> as I believe a large amount of cash has been, and continues to be, on the
> sidelines. I also suspect a lot of buying power is still tied up in short
> positions.
>
> Earnings reports so far appear to be muted, most meeting lowered
> expectations, which suggests to me the "real expectations" were far worse.
>
> Tom Worley
> stkguru@bellsouth.net
> AIM: TexWorley
>
>
>
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