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Strategies & Market Trends : Free Float Trading/ Portfolio Development/ Index Stategies

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From: dvdw©	11/5/2007 7:45:56 PM
	of 3821

Begin doing some analysis of Revenue Per Share, many companies have changes in the last year or so since we've talked about it. This metric gets to the heart of whether there is a reasonable chance that in the impending cycle for Forward Demand you as a shareholder have any chance of benefitting. Its also a cut and dried screen for culling stocks that are Herd issues. I would suggest its one of the most under rated financial screening metrics when considering established companies; without revenue you have no earnings (usually) and if you have earnings, how much is going to you as an investor? Is the return equitable in your mind or is the outlook for accelerating sales and earnings growth dampened by competitive landscapes and low margin returns. We see this as a screening metric for established companies, kind of a complimentary tool to looking at issues based on float metrics, which are wholly distinguished by the art of forecasting ahead of the companies accelerating sales curve. Look at a broad enough swath of companies and you develop a good insight into above and below average performance. Here are a few popular companies Rev Per Shr from Yahoo AMAT Rev per share outstanding $6.96 SIRI Rev per share outstanding $ .50 CSCO Rev per share outstanding $5.95 ABX Rev per share outstanding $6.68 IBM Rev per share outstanding $66.00 MS Rev per share outstanding $40.29 INTC Rev per share outstanding $6.109 KO Rev per share outstanding $11.85 COP Rev per share outstanding $97.83 LUV Rev per share outstanding $12.49 AMGN Rev per share outstanding $13.09 RTN Rev per share outstanding $48.96 JNPR Rev per share outstanding $ 4.77 What i like to do is get out some old Value Lines from a decade ago or so, and compare the companies when they were much smaller, count the number of splits, and determine how good or bad they've performed for shareholders. Lots of Current SIP stuff is beginning to accelerate, its fun to see what might happen as these floats grow to meet market demand. You'll also need to be aware of each stock with respect to their respective peer group. Valuation can better be done when you compare like business and then compare the business groups against each other with respect to forward demand and or market saturation.. Its never a smooth or straight path, but the proof is in the pudding. These numbers can take dramatic turns when your entering a favorable business cycle for any particular category, you can also see the range bound nature of some old line players with respect to their growth measured against declining forward demand. The numbers can be very tricky on first glance....just make a little ledger for comparative purposes of some of your favorites to give yourself a heads up of particular relative performance to this metric. Perhaps the single best utility derived from this exercise is it helps develop your peripheral vision. there are always explanations for the numbers that seem outlandish, by studying this category, you hone your understanding for nuances that reflect business fundamentals.

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