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To: Czechsinthemail who wrote (12308)	2/20/1998 11:09:00 PM
From: RGinPG	Read Replies (2) \| Respond to of 95453

Are you talking about analysts upgrades/downgrades, or revisions of earnings estimates? These are definitely two different things. I think the upgrades and downgrades are less meaningful and coincide with very short term price movements. The earnings estimate revisions are something else though, these are the heart of what moves stock prices, anticipation of future earnings growth. I follow this carefully and can be seen on my site for all the stocks I follow on the Fundamentals / Earnings Estimates page. All the positive and negative revisions are summed for the last month and last 2 months. MDCO & ESV are at the top of the list for positive revisions in the last month (no negative revisions for these two). Earnings surprises are also important too of course and I've included these for most of the stocks for the last 3 quarters. These tend to be much more objective than brokerage upgrades/downgrades. Sometimes I think these have more to do with their trying to push stocks (or abandon them) for reasons other than the fundamentals. rgdoczzz.home.texas.net

To: Czechsinthemail who wrote (12308)	2/23/1998 5:13:00 AM
From: bobster	Read Replies (2) \| Respond to of 95453

Sorry to take so long to respond. My fault, should have been more clear. I don't give a hoot about upgrades and downgrades. No one ever says sell and a strong buy makes a stock pop for about a day and a half. I care a lot about estimate revisions. Mostly for the current Q but I also consider the current Yr and next Yr. BTW, I do not try to distinguish between companies using revisions analysis, I was offering my opinion as to when to buy what someone had already decided were good companies. You asked about the time period that these revisions are taken. Time is not a factor. It doesn't matter when. I'll explain. Analyst A publishes, last summer, an estimate for the Mar '98 Q for $5. When I look at the March Q, I will read that as 0 up, 0 down. If that analyst, last Nov. lowers that estimate to $4.50 for the Mar Q, I would read that as 0 up,1 down. If last week, he changed it to $4.75, I would see 1 up, 0 down. If he then went to $4.85, still 1 up, 0 down. Time and to a large degree, the amount of the revision do not matter. By the way, this is identical to the way these numbers are supplied to the analysts by First Call. The revision will impact the stock price more quickly than I could possibly take advantage of. But here's the thing. Analysts, most of the time, underestimate the amount of the revision. When they revise up, it is usually not enough. Same on the way down. When you see a majority of these revisions in the same direction, the odds are, you will soon see an earnings surprise. This fact is reported on occasionally in Value Line. I don't save them, but if you have your old Selection and Opinion sections, it's in there somewhere. As far as DO is concerned, on a FA basis, they are among my three favorite company's in the group. (The others are FGII and RIG) And I certainly am well aware of the problems causing the downward revisions, and I agree that they appear temporary. The fact remains that from the point of view of a quantitative analyst, they have a problem. I'm waiting. So I respectfully disagree with you about my emphasis, and suggest that maybe you are not putting enough emphasis on the earnings downgrades. If you own the stock, I hope I'm wrong, bobster