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Strategies & Market Trends : Screening for Stocks
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To: B.K.Myers who wrote (1)8/27/2000 5:26:27 PM
From: B.K.Myers  Read Replies (1) of 66
 
Companies Growing Earnings faster than Revenues and selling
at low P/Es

When I created this screen, I was looking for undervalued
established companies whose earnings were growing faster
than their revenues. I believed that this would identify
well-managed companies that were concentrating on earnings
growth.

I used MarketPlayer’s Screening Engine
(http://www.marketplayer.com/client/screening/engine.html).
Here are the criteria that I used:

Trailing PE < 1 Year EPS Growth
Trailing PE < 5 Year EPS Growth
Trailing PE < 10 Year EPS Growth
6 Months EPS Growth > 1 Year EPS Growth
1 Year EPS Growth > 5 Year EPS Growth
1 Year EPS Growth > 10 Year EPS Growth
5 Year EPS Growth > 0
10 Year EPS Growth > 0
1 Year EPS Growth > 1 Year Revenue Growth
5 Year Revenue Growth > 0
Price to Book <= 3
Price to Sales <= 4
Trail PE < 25
Dividend Yield > 0
ROE > Trail P/E

On August 12, 2000, this screen identified 6 companies:

Symbol Company Name Price EPS Grwth Rate
PHM Pulte Corp 29.00 58.1
AVT Avnet Inc 53.00 74.5
BSC Bear Stearns Companies Inc 61.88 48.9
APPB Applebees Intl Inc 24.88 30.3
RJF Raymond James Financial 26.81 27.6
DRC Dain Rauscher Corp 71.06 64.3

What immediately caught my eye was that Pulte Corp (PHM)
was also on my Established Companies with Accelerating
Growth and Low PEG ratios. I decided to look a little
closer at PHM. At Investors Business Daily
(http://www.investors.com/) I found the following ratings:

Overall 93
Technical 88
Fundamental 96
Attractiveness 80
Group Technical 68
Group Fundamental 95
EPS 91
RS 83
Grp RS A
SMR A
Acc/Dist A

Pulte Corp is in the Building-Resident/Commercial industry
group. This industry group could be coming under pressure
because of the past rate hikes by the FOMC. Otherwise, the
company fundamentals look good, so I decided to look at
PHM’s chart.

Looking at the charts I noticed that PHM built a base
between $21 and $23 from April through July. Then at the
end of July and early August broke out of this base with
strong volume and is now trading between $28 and $30.
Looks like I missed the first breakout, but PHM could be
building a second base in the $28 to $30 range. If it
breaks out over $31, it looks like it could run up another
20%.

I will watch this stock for that breakout.

How have these stocks done since August 12, 2000?

Symbol Price Current Change % Change
PHM 29.00 28.69 -0.31 -1.1 %
AVT 53.00 61.31 8.31 15.7 %
BSC 61.88 58.75 -3.13 -5.1 %
APPB 24.88 24.00 -0.88 -3.5 %
RJF 26.81 26.06 -0.75 -2.8 %
DRC 71.06 71.06 0 0 %

I will watch these stocks, especially PHM over the next few
months and adjust my screen criteria as needed.

B.K.
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