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Technology Stocks : THQ,Inc. (THQI)
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To: Double Dipper who wrote (2984)1/10/1998 12:10:00 PM
From: Sigmund  Read Replies (1) of 14266
 
I really would not pay much attention to VectorVest except to acknowledge that others may pay attention to it.

Current Vector Vest valuation is $26. Parameters which might be slightly changing the robots evaluation are falling interest rates and increasing securities analyst's projections of earnings growth rates.

What do you make of the following: "THQI has been assigned to the Travel Group. VectorVest classifies stocks into
over 190 Industry Groups and 50 Business Sectors."

If we think that earnings are going in the Fourth quarter and beyond to be higher than expectations then this has not at all been factored into the VectorVest's robot's analysis.

I view VectorVest as a big regression analysis which is probably very very useful as a screening tool to pick stocks for consideration as buy or sell candidates. But to place a lot of importance on the precision of their valuation estimate would be to place a degree of importance on it that I doubt the VectorVest people would feel is appropriate.

Try their formula on any development stage company for example. This type of formula will underestimate value. Try it on other companies which are rapidly improving their position. For a company that is improving its position, such a regression analysis based or similar formula will necessarily trail the true value.

Some of their other measures may be more useful than the value measure.
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