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Strategies & Market Trends : Roger's 1997 Short Picks
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To: Pancho Villa who wrote (8885)12/25/1997 11:57:00 PM
From: vegetarian  Read Replies (2) of 9285
 
Looked at PCTY and here are some observations (You have a choice to either feed me a crow or just chop my neck ;-))

-Overall does not look like a short at this time, but could develop into a mediocre short (as compared to AVNT etc) some time later
-Chart broken out of a rectangular consolidation between 25-30 I guess on the news of a split so there is momentum behind it
-the stock split is suspicious I don't see why a 30$ stock needs to split other than just a hope to boost its price
-Company has good EPS growth from 1994 onwards: 11c 24c 56c(96)
-Profit margin (and ROE) seriously eroding in 97, from 94 on: 6.7 5.6 7.8 3.9(97)
-Here is the scary part for being short this stock; the company has 8.1M shares (which will be 12M after Jan 16 when it splits 3:2) and the company has 53 institutions holding 76.5% of the shares so that would mean that only 2M shares are available in the market.
This would have all undesirable characteristics for being short (squeeze, not getting shares, being called etc), I would look for more liquidity
-Looks like no options exist on this one so buying puts is out; would probably be a good short when it breaks through the support at 25 on the downside (a sign that the instituitions are dumping, although may be hard to catch it then), otherwise I will probably leave it alone.
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