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Strategies & Market Trends : Disciplined Investing, especially the NAIC way -- Ignore unavailable to you. Want to Upgrade?

To: - with a K who wrote (392)	3/15/2003 9:52:17 PM
From: - with a K	Read Replies (1) \| Respond to of 469

Does anyone have any thoughts on ADP after its shellacking? It too has EPS growth of linear beauty. But its been hit hard and now I have to do the OPPOSITE of BMET and FRX to not have it such a screaming buy: lower the low price $9 below any of the choices offered, severely cut back the high PE and use a very conservative EPS estimate. After all that pessimism I get a buy up to $36 and an up/down of 5.3 to 1. It pays a real small dividend and is a popular holding of NAIC clubs. I don't have a VL on them..... any thoughts? News snip: ADP said it now expects fiscal 2003 earnings to range between $1.68 and $1.73 a share, compared with earnings of $1.75 a share for the fiscal year that ended June 30, 2002. The company also said revenue will be flat with the $7 billion in fiscal 2002. ADP trimmed its fiscal 2003 earnings and revenue growth forecasts in January, but at that time expected low-single digit percentage growth compared to a previous mid-single digit estimate. Analysts currently expect earnings of about $1.79 a share and revenue of $7.12 billion for fiscal 2003. The company's revised guidance primarily reflects the company's plan to increase investments in promising growth areas, cost reductions that include exiting "nonperforming" product lines and investments to retain "quality associates."

To: - with a K who wrote (392)	3/15/2003 11:02:46 PM
From: The Philosopher	Respond to of 469

That's the kind of stock that goes on the "pounce list." The ones you've finished up the SSG on, are excited about as a company but are just too rich. But if you have an alert list that tells you when the stock gets to a certain price, you can put it on the alert list at what you're willing to pay for it and if it hits your target and still looks like a buy, pounce. I've forgotten where I heard that term, some NAIC seminar or something I think. But once I get my portfolio in the kind of shape I want it in, I'm going to create my own pounce list. Probably BMET will be on it, along with some other goodies. I don't know FRX. Is it worth looking at, or are the prices just so far out of line with NAIC principles that it's not worth the time to analyze? BTW, I re-read an old article I had marked in BI a few months ago and came across the "barbed wire" concept. There are a lot of stocks that are in the buy zone just because they are near their all time lows. What the "barbed wire" concept is is that there is a line of barbed wire between sections 2 and 3. You analyze sections 1 and 2, and only if the stock looks really good do you pass over the barbed wire to section 3. I personally add the PERT-A review to the barbed wire; if the % growth columns are dropping off, I don't even go further. It's only after a stock passes those three tests that I even go to Section 3. That's not the way I used to do it. I used to look at Section 1, then if it looked good I would toss in a growth figure and go straight to Section 3. That article opened my eyes, and so I changed my approach. FWIW.