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Strategies & Market Trends : Bosco & Crossy's stock picks,talk area -- Ignore unavailable to you. Want to Upgrade?

To: Volsi Mimir who wrote (2540)	3/2/1998 8:30:00 AM
From: Crossy	Read Replies (1) \| Respond to of 37387

Eddyb, let me straighten that out - first I believe that the many insights You and many other knowledgeable people provide here is more important than my PSR or TA studies because You provide insight to the underlying gameplan. To clear the remaining thing up, PSR is not a TA function. It means Price to Sales ratio and is a valuation function. The higher, the more expensive a stock is. Since PSR is also dependant on attainable profit margins (in an industry & management context), it should also be asessed with respect to average PSR ratios per industry, suggesting that, p.e. for a lackluster performing company in a stellar industry, a fresh management team might unlock hidden, yet untapped earnings sources. This means the higher the average profit margin of an industry, the higher the average PSR should be. Also, not yet completed turnaround situation tend to command a smaller PSR ratio. Consider LRCX PSR-ratio of under 1 instead of AMAT/NVLS PSR-ratio of about 3. This means, You can somewhat guess that LRCX after return to profits could rise 3times. PSR ratios also guide You to values in a group of profitable companies: consider the RF-amplifier mfg. like SPCT, PWAV, MPDI. The latter MPDI is showing increased profits but still a PSR of below 1. This is a concept that's being made popular by Warren Buffet ->value investing.. Last but not least, let me hint about my PSR formula. Normally people take the trailing 12 month sales figure to calculate that ratio. I don't becasue this is too much of historical data. I take the last quarter and multiply by 4. In case of a non-seasonal dependent demand pattern (unlike in retailing: Xmas !), this is feasable and should give You better, more sensitive results. best wishes CROSSY