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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Czechsinthemail who wrote (16877)	3/27/1998 8:02:00 PM
From: jbe	Read Replies (1) \| Respond to of 95453

Baird, you write: jbe - Thanks for sharing your scan results. One word of caution is that these essentially provide you "looking backward" results and may not be indicative of the "looking forward" world that the market is trying to predict. Actually, a few of the criteria I used are of the "looking forward" variety: projected EPS rank, and company growth ratio (projected five-year earnings divided by projected p/e for next fiscal year). In any event, in deference to your point of view, I tried to forward-orient the search a bit more by replacing projected EPS rank (which takes into account past as well as projected future performance) with projected 5-year annualized EPS, and by replacing current p/e ratio with projected p/e for next fiscal year. Again, seven oil companies came up. Substantially the same line-up: ESV, TDW, TMAR, CDG, PDS. NE and CKH disappear, to be replaced by MDCO and DO (both of which also have negative free cash flow, btw). And looking at recent price movements, I am not at all sure that a possible "oversupply of boats" is affecting investor confidence in companies like TDW. TMAR is also a boat company, and it has been moving up sharply (granted, from a lower base). Although I agree one should take possible future performance into account as well as actual past performance, one must also bear in mind that the possible is less of a sure thing than the actual. What happens when a high-flying company (especially one with a high p/e, like your favorite RIG) disappoints expectations? You said it - catastrophe! bloodshed! & etc. I don't think one can or should overlook past performance, especially where something like earnings are concerned. SO, into this last search I introduced, in a list-only mode, a favorite criterion of mine: 5-year EPS consistency. A company that has consistently delivered the goods over a long period is more likely, I think, to continue to do so than one with a spotty record, and less likely to give investors a nasty surprise. Lo and behold, good ole TDW scored in the 95th percentile for EPS consistency; ESV came second (88th percentile); CDG third (65th percentile); MDCO fourth (53rd percentile), and the others are all too new (as public companies) to be rated. All that said, I have to agree with you 100% that "it is helpful to consider some things that strict number crunching won't provide." That is why I frequent this thread! There is no way that I could find out, by myself, all the "things" about this business that you folks provide. You are one bunch of knowledgeable people, and this has to be the best thread I have ever located on SI. Thanks again. jbe

To: Czechsinthemail who wrote (16877)	4/4/1998 9:12:00 PM
From: jbe	Respond to of 95453

"Forward-looking" Numbers: Can They Be Trusted?" Doodling around on Telescan again, I found you could run a search using any single criterion you want, and get a list of the Top 25, listed in order. So I ran a search for large companies with the highest projected 5-year EPS growth (annualized). I am sure you will not be surprised to learn that both RIG and NE showed up among the Top 25 -- as #16 and #22, respectively. But guess who was ranked ahead of them on that list? Yahoo (#3) and AOL (#6). Hahahahahahahaha. So how much confidence can one have in "forward looking" numbers? jbe