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Strategies & Market Trends : Stock Attack II - A Complete Analysis
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To: Chris who wrote (28778)1/30/2002 12:17:54 AM
From: Berney  Read Replies (2) of 52237
 
Some pesky FA observations.

As many of you know, I follow a group of stocks that I call the Big Boyz. Together this group of 76 companies accounts for 50% of all of the equity in this country. It reflects my view that the little fish usually have to compete for the scraps.

With 80% of the Big Boyz reporting, it doesn't look good. The median eps for the 0112 quarter was $ .26, compared to $ .34 for the 0012 quarter. This represents a 24% reduction. The bigger issue is that the 0103 quarter is still going to be a difficult comparison with the actual median eps $ .40. I cannot quantify the difficulty in achieving this comparison as too many of the analysts use the pro forma numbers in their estimate; however, I believe that we will be lucky to see eps flat with the 0112 quarter, which is going to be a brutal comparison.

The TTM (trailing twelve months) median eps was $1.21 as compared to $1.71 a year ago. This represents a 35% decline. ROE (return on equity) declined from 22.8 to 17.4, or a 23% decline. Mr. Buffett was right to suggest some time ago that the ROE numbers were unsustainable.

Yet, the TTM median PE ratio sits at 29.3 compared to a recent historical - bull market median - of 23.5. Nonetheless, this is just all unimportant FA stuff. Well, at least until it is important.

Just a View from the Swamp,

Berney
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