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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: jeffbas who wrote (3831)	4/14/1998 12:50:00 AM
From: Shane M	Respond to of 78670

jeff, I agree with your summary. Based on the data I'd say the "sweet spot" would be companies with PE above 8 and below 20, and sales per share growth between 0% and 20%. Coming from a "value" frame of mind, I was sortof surprised that good performance could consistently be found in stocks with PEs up to around the 18 to 20 range. I had expected the superior returns to begin diminishing at lower PEs. Another thing that surprised me is that moderately negative sales per share growth (between 0 and -10%) at low PE's seems to be acceptable as long as the PE is held lower, to between 8 to 16. I'm interested to see if this effect persists using other valuation methods. One thing in particular that I found interesting was the "win percentages" in the preferred section of the grid. I'm one of these fellows that really hates to see my stock go down, and approx 85% of the stocks in this range had price appreciation in the year. In terms of safety of principle this range seems favorable also. I plan to look into doing P/S and P/Bk as time permits, but probably won't be before the weekend. Hopefully can put everything together and develop a screen that produces a managable number of stocks with consistent market beating characteristics. Keep in mind that this is just data over the course of 12 months for the selected stock sample. Like they say in the mutual fund prospectus: "Past performance is no guarantee of future results" BTW, One thing I forgot to mention when I posted the numbers was that I had also excluded financial sector stocks from consideration. Shane