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Non-Tech : Helen of Troy Ltd (HELE)
HELE 19.41+1.0%Nov 7 9:30 AM EST

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To: Rambi who wrote (25)10/6/1997 12:40:00 PM
From: MOLLYSUE   of 295
 
Penni Yes it is a Beardstown method (1 of 10) to determine potential.
It evaluates relative odds of potential gain versus risk of loss for a given price per share. A 3to1 (or better) potential upside in the projected appreciation of a stock is preferred. We use Value Line for the projections. and here in may lie our groups misunderstanding. We are useing Value Lines 2000-2002 Projections (not determining our own don't know how).
Method: determine the projected high price ($40). Subtract the present cost ($15). Take the present cost ($15) and subtract the projected low ($10). Divide the upside potential ($25) by the downside risk ($5) [numbers in parenthesis hypothetical]This would be a 5:1 ratio.
Now in the case of Clayton Homes (CMH) using $18 as a recent price the upside projection Value Line gives is $30 ($30 -$18= $12) The downside is $20 ($18-$20=negative number)at this point we don't know what to do. We would like to use this method as explained but don't know if we should JUST believe if the downside is higher than the recent price it passes this particular "test".
Thanking you in advance
MOLLYSUE
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