del: Thanks for the post; interesting site. I used to screen for stocks using AAII's "Stock Investor" program. The vectorvest site seems use similar parameters as my screening criteria in valuing stocks.
The problem with such a "canned" approach, IMO, is it misses special situations such as FRSH. FRSH's acquisitions at the end of last year, as well as some other factors, resulted in losses for the year, and FRSH still has negative trailing 12-month earnings. We know the situation is much more positive than a company that is losing money. Therefore, while the vectorvest program values the company at $1.50, we know (assuming no unpleasant surprises) the company probably should have a minimum value of $4.00.
It's interesting how the program values a $3.50 stock at $1.50, but then puts a buy on it nevertheless. The buy signal appears to be generated by the fact that the price has risen. So, it appears the buy/sell signals are based on T/A, not fundamentals. |
