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Non-Tech : C-A-N-S-L-I-M: A Simple, Easy to Use Stock Picking System
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To: John T. who wrote ()7/11/1999 4:28:00 PM
From: John T.  Read Replies (1) of 42
 
CHILDRENS PLACE RETAIL (NASDAQ: PLCE)

I submit that CHILDRENS PLACE RETAIL (NASDAQ: PLCE) is a buy, based on C-A-N-S-L-I-M principles. My evaluation is as follows:

1. C = CURRENT QUARTERLY EARNINGS PER SHARE -- PLCE's current quarterly earnings per share are up a major percentage over the same quarter last year. The quarter ended 4/30/99 is up 155% over the same quarter last year. Quarterly earnings increases appear to be accelerating. NOTE: PLCE's earnings for the quarter ended July 31, have historically been losses (2Q96-97: -0.06; 2Q97-98: -0.3; 2Q98-99: - 0.02). 2Q99-00 earnings are due August 18. First Call estimates a loss of 3 cents.

2. A = ANNUAL EARNINGS INCREASES: LOOK FOR MEANINGFUL GROWTH -- PLCE's annual compounded growth rate of earnings is 75% per year over the last 5 years.

3. N = NEW PRODUCTS, NEW MANAGEMENT, NEW HIGHS: BUYING AT THE RIGHT TIME -- PLCE is a specialty retailer of high quality, value-priced apparel and accessories for newborn to twelve year old children. PLCE is emerging from a seven week price consolidation pattern and is within 9% of a new high.

4. S = SUPPLY AND DEMAND: SMALL CAPITALIZATION PLUS BIG VOLUME DEMAND -- PLCE has 25.5 million shares outstanding and 5.5 million shares float. PLCE management owns 78% of the total outstanding shares. Volume on July 9 was 50% above PLCE's 50-day moving average of volume. According to Daily Graphs (an Investors Business Daily service), PLCE has an A rating for accumulation/distribution, meaning that PLCE is under heavy accumulation.

5. L = LEADER OR LAGGARD: WHICH IS YOUR STOCK? -- According to Daily Graphs, PLCE is the leader in the Retail - Apparel/Shoe Industry Group with a relative strength of 97 (out of 100) and an earnings per share rating of 99 (out of 100). The Retail - Apparel/Shoe Industry Group has a group relative strength rating of 78 (out of 100).

6. I = INSTITUTIONAL SPONSORSHIP: A LITTLE GOES A LONG WAY -- According to Daily Graphs, 31% of PLCE's floating supply of stock (31% of 5.5 million shares) is owned by funds and banks.

7. M = MARKET DIRECTION: HOW TO DETERMINE IT -- All major indexes (DOW, COMPQ, SPX, NDX, etc.) are at or near their all time highs. All major indexes have broken out above price consolidation patterns. This is a BULL MARKET.

TECHNICAL ANALYSIS--

1. PRICE AND VOLUME BREAKOUT -- On July 9, price increased 5% and the volume was 50% above PLCE's 50-day moving average of volume.

2. BREAKOUT FROM SOUND BASE BUILDING ZONE -- On July 9, price broke above a seven week sideways price consolidation pattern.

3. MACD BUY SIGNAL -- MACD crossed over its signal line slightly above the zero reference line.

4. STOCHASTIC BUY TIMING SIGNAL -- Stochastic in mid range (not overbought) and heading up.



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