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Strategies & Market Trends : Point and Figure Charting -- Ignore unavailable to you. Want to Upgrade?

To: wizzards wine who wrote (1594)	3/9/1998 6:38:00 PM
From: Mr. BSL	Read Replies (1) \| Respond to of 34816

Hi Preston. After VL 1 & 2, I look for Institutional Sponsorship. If a company is not in the S&P 500, I like to see it owned by at least 100 mutual funds. IBD publishes this number for NASDAQ stocks on Tuesdays. Lombard (Discover) also provides good info on who owns the stock in their Thompson research section. After that, it's all P&F!!!! Duke

To: wizzards wine who wrote (1594)	3/10/1998 3:29:00 PM
From: bobster	Read Replies (2) \| Respond to of 34816

Hi Wiz, What do you think of VL software. Can you create your own screening criteria? Anyway, since you asked about "other filters," I thought I'd put in my two cents. First, I wouldn't automatically eliminate any stock that wasn't a 1 or 2. I have been looking at VL for a long time and although it is a proprietary system, it is heavily weighted with two things. One is earnings momentum, a good thing. The other is intermediate term relative strength, which my best guess tells me is measured over the last 9 months. The problem here is that a 3 rated stock, with good earnings momentum, might have to move up sharply in price before it became a 2 ranked stock. At that point, I would wish that I bought it a while ago. Here is another way to use VL that you might want to mess around with. Interestingly, 4 out of 5 companies that pass through these filters are 1 or 2 ranked stocks. It's long so pour yourself another glass of wine. 1. Eliminate all the stocks with a suspended rank. Be sure not to eliminate stocks with a history too short to assign a rank to. .....a. Suspended rank stocks are usually in the process of being taken over, so they sometimes can be a good short term play, long or short. 2. Check out the financial strength rating. Depending on the risk level that you are comfortable with, you may want to get rid of all the C & C+, and may sometimes eliminate C++, but would keep B or better. 3. Look at the tax rate that the company paid LAST year. You may want to eliminate a company that had a rate lower than 25% IF the rate this year will be at least 10% higher than last. For example GLM paid 8.1% last year and will probably pay around 28% this year. That isn't going to make earnings comparisons any easier. I'd eliminate them, there are so many other possible companies, who needs more problems? If GLM's rate this year was expected to be 18% (less than 10% higher than last year) or less, than I probably wouldn't eliminate them on this factor alone. 4. Revenue. I put a lot of weight on top line growth. Compare the most recent quarter with the same Q a year ago. You may want to eliminate any company with a growth rate of less than 10%. This will tend to eliminate many of the very large Blue Chips, so use a lower % if you don't want to do that. 5. Revenue growth from two quarters ago. Again compare that Q with the same one from the previous year. You might toss out any company with a growth rate of less than 5%. This screen helps insure against any of the one quarter wonders. It gives you companies with at least two consecutive quarters of good top line growth. 6. More Revenue stuff. Compare the %'s from 4 and 5 above. IF 4 is higher than 5, great. That shows that the rate of revenue growth is accelerating, a good thing. If 5 is about the same as 4, that is fine also, but if 5 is substantially greater than 4, it shows that top line growth is high, but is decelerating, a bad thing. 7.8.9. Do the same things with earning per share. Change the % in # 4 to 20%. Change the % in 5 to 10%. What you will end with, is about group of about 150 (out of VL's 1700) small and medium sized growth stocks. About 80% of them will be ranked 1 or 2. Then you get to go read up on them, throw out some more, and then P&F what's left to death. Pretty soon, your rich and famous, and making appearances on Oprah. Hope this gives you some ideas, bobster