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Technology Stocks : Y2K (Year 2000) Stocks: An Investment Discussion
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To: Done, gone. who wrote (7948)11/18/1997 5:32:00 PM
From: paul e thomas  Read Replies (4) of 13949
 
Y2K LEAD STEER
As I stated several weeks back I believe CHRZ is a lead steer for assessing future Y2K sector prospects. It has 55 funds with ownership and 8 analysts with 1998 earnings forecasts.For 1997 to date CHRZ price growth is reasonably close to that of the software industry index (WG290), tracked by Worden.Chrz was hit harder however by the late October sell off and has in turn recovered faster. Over the last 7 years CHRZ has greatly outperformed the software index,rising from 1+$.The least squares growth rate for the software index is 38% per year over the last 7 years and 34 % over the 12 monthe ending 11/17/97.Over this same period the Russell 2000 index growth rate was 14%.I have calculated the percent growth from mid -November to the end of January for each of the last 7 years. This period includes the January effect. This 10 week period accounts on average for 1/3 of the annualized gains. It has ranged froma low of -9.1% last year to a high of 32.6% in 1990-1991,then 24.6% in 92-93 and 22.7% in 91-92.According to First Call the earnings growth rate to PE ratio for CHRZ is more favorable than that of the software industry. Therefore on one commonly used measure of fundamentals CHRZ is a more attractive investment than the average software company. On a chart pattern basis CHRZ fell significantly below the lower band of a long term trend line I have drawn.On previous occasions when this has happened Chrz has recovered sharply( which it did from last Wednesday to Monday). It has historically trended up to the upper band over perhaps 6 weeks. I believe CHRZ can reach >36 before hitting the upper band. The Worden BOP charts also show positive volume related activity to support further price movement. I am not saying CHRZ is the best investment for the next 6 weeks. What I am saying is watch price and volume action closely on CHRZ as I believe it will provide guidance on what to expect from stocks not as widely held by Mutual funds. Obviously though stocks like TPRO which have low institutional ownership may get an extra kick if y2k stocks attract buying interest.
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