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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: Jenna who wrote (64239)	10/1/1999 3:57:00 PM
From: Jenna	Respond to of 120523

<<Manual will be published professionally after editing>> so I would take advantage of the free .pdf version available on the website for for subscribers. Additions will be made to cover every trading opportunity tailored to our picks and of course more research and tracking of our intermediate holds,IPO's for intraday trading, real time Prosearches etc.

To: Jenna who wrote (64239)	10/2/1999 6:57:00 PM
From: Jenna	Read Replies (3) \| Respond to of 120523

<<John Bollinger's Accelerating Earnings Database has parallels from Market Gems Earnings Velocity, Acceleration and Correlation Coefficient database>> Bollinger uses the ratio of accelerating/decelerating earnings growth in stocks, whereas we are interested in stocks with earnings acceleration and velocity increasing quarter after quarter and year after year. America's biggest companies are poised to report their best quarterly profit growth in more than four years, according to the number-crunchers who track corporate financial performance. Smaller businesses are improving as well. Wall street analysts expect S&P) 500 companies to raise earnings per share by 19.7% in the third quarter versus 1998's third quarter, according to First Caoll/Thomspon Financial, which compiles analysts' estimates and tracks actual earnings on publicly traded companies. Because analysts typically underestimate profit growth, First Call sees S& P 500 earnings rising an even heftier 22%. Everything is on target for this to be the best quarter since the first quarter of '95, when S& P profits surged 23% said Chuck Hill, director of research at First Call. Most companies closed their third quarter on Thursday and will begin reporting results in less than two weeks. By then, Hill expects analysts to pare their forecasts down to an average gain of 19%. If history repeats itself, the analysts will prove a tad too conservative, and the S&P 500 companies will beat Wall Street by about 3 percentage points. Rebounding corporate performance buttresses the stance of high-profile stock market bulls, among them Gold Sachs strategist Abby Joseph Cohen and A.G. Edwards' Al Goldman. Their views run counter to bearish forecasts of many technical analysts, notably Prudential Securities' Ralph Acampora, who see in the recent sell-off the threat of a deeper decline in share prices. Of course, good earnings news is more welcome than bad earnings new, but investors should take the upbeat tidings without emotion. "Russell expectations are at 19.6% growth as a percentage of all corporate pressed earnings of 1998." Quarterly financial reports describe the past. By the time most companies post results, analysts and big-money players like mutual funds already have had a good guess as to the numbers. Stock prices tend to move ahead of corporate earnings reports. And while earnings form a critical piece of share price direction, they don't tell the whole story. Fears of Federal Reserve tightening have dominated the market of late. Earnings growth at smaller companies also is shaping up nicely as evidenced by analysts' estimate for the companies in the Russell 2000, the widely followed index of small companies. The improving breadth of the earnings ebound stands out in another indicator compiled by John Bollinger.. Each day he enters into a database the number of companies reporting acelerating earnings growth over the prior quarter (what Market Gems also calls accelerating earnings) versus those reporting decelerating quarterly earnings) Then he computes a variety of ratios from the data. One tracks net positive earnings growth as a percentage of all corporate earnings reports of the past 63 business days. That time frame basically corresponds to the number of business days in a quarter. Bollinger starts with the number of companies reporting better earnings growth over the past 63 business day, than subtracts the number of companies reporting slower profit growth. That provides the total of net positive earnings reports over the past business days. Dividing the net by the number of all earnings reports over the past 63 business yields the percentage figure. In a sense this tells how many companies, relative to the overall market, are showing accelerating earnings growth, net of companies that have experienced decelerating earnings growth. The percentage peaked at 35.84% on Nov. 13, 1997 , then went into a steep decline, a time frame that follows on the heels of the Asian Financial meltown and sell-offs in world equity markets. The figure bottomed at 9.31%. Since then it has recovered sharply to 20.7% It's still well off its highs, but is within striking distance of its average of 23% since Bollinger began compiling the data in 1987. Bollinger uses the data as a coincident indicator to explain the past. Earnings reports look backward, and the market looks forward," he said. Consider the market tops made by the S&P 500 on July 19 and the Dow Jones Industrial average on August 24. The subsequent decline of both indexes have taken place in the face of an improving quarterly profit outlook. With that grain of salt, the earnings picture looks heartening. Looking ahead, Al Goldman sees S&P 500 companies delivering $50 of profit per share for the full year a 12% gain over a year ago, and $56 in 2000, another 12% gain. He forecasts the same growth for the 30 companies in the Dow Jones Industrial average in 1999 and 2000 The outlook for corporate earnings is always one of the keys to the future direction of stock prices."* Goldman said in a recent note to investors. "the bears continue to predict that earnings will decline. We are raising our operating projections." ....Wall Street forecasts don't look too shabby for 2000 either. Analysts of S&P 500 companies forecast 17.6% earnings growth for the full year. the consensus among strategists, who look at the overall market and tend to be more conservative, pegs the number at 9.% end of report..[editor' comment... That is why we have to realize that our earnings plays are targeting earnings for the past quarter which is why I always emphasize the 'current quarter, next quarter' as well as current fiscal can and when possible next fiscal year. Although nothing was really mentioned about our particular brand of high earning growth stocks (more than 50% EPS growth, we can apply these forecasts to our own brand of stocks) Part of the reason we 'sell on the news' is precisely because the analysts and even the bulls have already factored in the price gain and are looking forward to the current quarter. That is why the earnings calendar is out 1 month in advance and the 4 last newsletters were concerned with October earnings plays that were close to being buys, while we are still in September. Simpler put by the time the next 3 weeks comes round we might think of shorting some our own earnings plays through the report, because in many circumstances they have already played out. Of course we will still have the coming 2 weeks plus any stocks that are actually still correcting might do fine through and around their earnings date. The coming two weeks are very important and of course the actual intense 2 weeks of the season, the best we could do is to find stocks in our lists that are not overbought and might still provide a jump before and/or after the report. The report from Investor's Business Daily above should show you the risks inherent in holding through earnings, and explain that even when a stocks 'beating the street' has been factored into the price 3-5 weeks ago. *parts reprinted courtesy of October 1, 1999 Investor's Business Daily