Hi KJC, I see you've already lured LemonHead here for some chatter. I'd been recommending to LH that a subscription to VL or at least a frequent trip to the Library would give a good base line for Due Diligence on most stocks of substance. Great job here, Thanks!
I have as the heart of my portfolio significant hours of Value Line review. I spend time each week at the city library (which happens to be directly across the street from my office) looking at VL. Also, I use data from the Index section of VL as the basis of my market risk indicator. All this has helped me achieve being a private investor for the last 14 years.
I've never put much emphasis on VL's "Timeliness" or "Safety Rank" but like the consistency of their data in many other areas. I look at "Institutional Ownership" (listed on the upper left), Insider Sells and Buys (upper left), BETA (Upper Left), Stock Price Stability (lower right corner), Price Growth Persistence (lower right corner) and Capital Structure (middle left side) as main items on any new stock idea and also as a review with on-going investments.
Things I look for are very high Price Growth Persistence (PGP) in conjunction with very low Stock Price Stability (SPS). This will usually confirm a higher BETA value also shown on the page. I remember back in '97 looking at Computer Associates. It, at the time, had a BETA of 1.55 (something I like). It also had a 70 PGP (out of 100). So, it should be a wild ride and give good long term growth. Then I looked at SPS and it was no surprise to find it at 20 (out of 100).
Keith Lemonhead and I both use the same risk management method and over the years I've found many of the VL "traits" as described to be quite valuable for selecting compatible equities for the risk management methods I use. In May, I gave a talk on how to use VL in such a fashion and was amazed that most of the people in the room either didn't use VL or hadn't noticed some of these less widely used statistics.
It took years to find, understand and start to use all the material that VL gives us on just one page! There's very few sources of information as compact as just one page of Value Line.
Since my library doesn't currently carry the expanded paper version of VL, I have to travel to the next town to read that portion! I'm thinking of giving the library the expanded edition as the library itself is going through a major expansion.
Best regards, Tom |
