RE: [CANSLIM] VRNT

From: "Katherine Malm" <kmalm@earthlink.net>
Subject: RE: [CANSLIM] VRNT
Date: Fri, 6 Jun 2003 09:07:53 -0500

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Hi Dave,

Heaven's no, I'm still a fundamentals junkie. I didn't refer to VRNT
specifically in my reply, just to Tomas' question as to whether a B/O on an
earnings report was valid.

As to other posts I might've made recently, they might have seemed "100%
technical" only because folks were asking about the charts, not the stock on
the whole. If I haven't done a due diligence myself, I'll rarely spend the
time doing that just to answer someone's question on the list, but looking
at a chart and marking it up only takes a couple of minutes. You can take a
look at a recent post I made on APPX to see what a fundamentals junkie I
really am. In it, I gave an extensive analysis of what I'd uncovered in my
due diligence last January, including a slew of red flags based on what I'd
read in the SEC reports.

I don't pay the least attention to broker's analysis or recommendations, so
that would have no influence on my own personal decision-making process on a
stock. The same would hold true for the PE, though I do look at in in
comparison to other stocks within the same industry and to the market as a
double check on things. In this case, VRNT is 1.6 times the S&P average.
That doesn't necessarily mean that the S&P average is "sane", but that VRNT
is in line for what one would expect from a growth stock.

As the market is a forward-looking mechanism, the price action does indeed
reflect an expectation of future earnings and growth. That, in combination
with a track record, shows what one might expect from a stock. In WON's
writings, he often talks about stocks in "turnaround" mode and suggests that
with as little as 2 quarters of improvement under their belt (along with
other requirements), that one could consider a stock a viable candidate.
Personally, with a stock like VRNT, public only since May of last year, I
see a darn good track record. Add that to their business, which serves a
very important and growing market (security), and I'll trust the technicals
on this one if they say the stock is forging ahead. That doesn't mean it
can't turn on a dime, but for the time being, the chart says full speed
ahead.

Take a look at the fundamental detail for VRNT and you can see the same
numbers that I am looking at:
http://www.cwhcharts.com/canslim/

Katherine

- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Davellil5@aol.com
Sent: Friday, June 06, 2003 7:40 AM
To: canslim@lists.xmission.com
Subject: Re: [CANSLIM] VRNT


Katherine:

Puzzled!

Are we now 100% technicians?  No more "fundies"?

VRNT has had negligible sales and earnings growth over the past 5 years.
However, sales in latest quarter was up 22% over same qtr. last yr., and
earnings
up 75% (to a big 14 cents/sh).

Projected EPS gain this year over last year is 30% and another 27% next year
(consensus of 6 brokers).

So, no history of performance.  What basis for believing that the very
recent
improvement can be maintained, brokers' optimism?  If the brokers are so
confident, why are they rating VRNT at 2.8, not "Strong Buy"?

Trailing PE at 190.

Sounds like the market is betting on the come.  Is that good enough for
CANSLIM these days?

Reason for asking is that, in all the email about VRNT (and some other
stocks
of recent interest), I've seen no reference to "fundies".

Regards, Dave


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