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Strategies & Market Trends : Moomin Valley (formerly Troll-free Zone) -- Ignore unavailable to you. Want to Upgrade?

To: Moominoid who wrote (72)	8/16/2001 2:25:10 PM
From: Wayners	Read Replies (1) \| Respond to of 2852

I ran a scan on companies with trailing 12 mos sales of 1B or more and ran a ratio of their market caps to their trailing sales. I found the average ratio among 883 companies to be 1.67. The highest ratio was 27 believe it or not and the lowest ratio was about.05. Crazy extremes for which there must be some other explanation. I also ran a scatter plot of company sales growth rates and total trailing 12 mos sales to see what growth rates combined with what total trailing sales appear to be outside the norm. Most companies are stuck under a parabolic curve with growth under 50% and under 30B in sales, with those the vast majority of those at 50% with less than 10B in sales. So next time you see a company sporting growth of 80% and sales of 50B---I doubt its sustainable for any period of time and most likely a great short. ENE was such an example and you can see what a great short it was.