Market Gems:Stocks w/Strong Earnings and High Tech. Rank Message Board

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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank

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To: Tim Luke who wrote (12731)	8/8/1998 2:35:00 PM
From: Jenna	Read Replies (1) of 120523

e-mail Some more FAQ's.. Questions: When is a stocks' collapse a possible buy opportunity as opposed to a leave it and forget it deal? answer: I am only able to set forth an opinion. I feel that if there are no fundamental changes in the company's outlook and no statements of any loses in earnings going forward, you can be comfortable watching the stock and waiting for a sign of reversal and get in for a short term hold or swing trade. (i.e. FINL,TAXI,CMGC,UNH) A 'leave and forget it deal' would be SOC,BOST,Z,GBFE Lots of declines are attributed to rumors and in some cases they are proved false. In other cases like CLCX it took a little more time for the law suit to be settled but CLCX has made gains since it's original loss due to the law suit. Conversely when a company fails to meet expectations and is subsquently downgraded, I would wait for it to hit bottom as it inevitably will. I don't think the buy would come immediately not as quickly as the situation cited above. When would a company that beats the street become a buy? answer: Usually if a company that isn't already trading at a very large multiple beats the street it is upgraded. [Unfortunately if the company is trading at very high multiple and is at the top of their trading range it could be considered overbought and would actually be downgraded AFTER earnings. (Sanmina) ] So if the stock is NOT downgraded and if the stocks earnings estimates for the coming quarter and fiscal are usually revised upwards. It is at this point that the institutions and mutual funds take notice. You will notice very large trading blocks going through at this time. How does identification with a sector in disfavor effect a stock that has strong fundamental and good value on its own merit? answer: I would look at the company and check it's earnings velocity going forward the next three to five years. There are value indicators you can use, and also internet resources such as Zacks Earnings Estimates, Analysts' concensus rankings, Value Line, etc. If the company looks to have accelerated growth prospects going forward it could possibly be a buying opportunity.

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