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Strategies & Market Trends : Due Diligence - How to Investigate a Stock -- Ignore unavailable to you. Want to Upgrade?

To: The Other Analyst who wrote (682)	8/18/1999 11:21:00 AM
From: Bob Rudd	Read Replies (1) \| Respond to of 752

New Topic - CATALYSTS - You found a great stock - obviously undervalued, great profit potential - that was 6 months ago. Why hasn't "The street" recognized this great find and accorded it higher valuation? Or you've found a great short - way overvalued and the market proceeds to show you just how far beyond "overvalued" it can take the stock - What gets this silliness recognized? A catalyst is something that changes investor perceptions of a company's prospects. Here's a brief list of potential catalysts some with examples and comments: Interest rates - depending on sensitivity Exceeds expectations - Earnings better than expected News better than expected * Negative development doesn't occur or has less impact Lower cost factor Airlines get lower oil prices Airlines get lower selling costs from net Higher price realizations $ lower reduces foreign competitive prices Foreign demand increases due to recovery Higher demand - more housing due to lower rates drives drywall demand above capacity * Hot product, advertising stimulates demand Competitor dies or is bought [Helps those not purchasing CompUSA buys Computer city, hurting itself but helping BBY Of Depot etc Regulatory Change PPS whacked SNF's What if it partially reversed? Takeover possibilities Lessened by defensive measures, poison pill, or concentrated ownership Restructuring - Spin-off divisions or tracking stock makes value visable Asset sale - undervalued asset New patent, discovery Entremed - High visibility high potential, despite low probability *Biotech - Move up to phase x trials improving approval probability Web strategy - Co announces e-commerce strategy and stock soars Recognition of Option value Technical signals - breakout momentum New management Seeking additions to list and comments about catalysts bob