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Microcap & Penny Stocks : Financial Shenanigans: Stocks Looking for a Fall -- Ignore unavailable to you. Want to Upgrade?

To: ftth who wrote (88)	6/18/1998 3:31:00 PM
From: Reginald Middleton	Respond to of 108

I have not seen the article, but I will try to take a look at it. It is my belief that EPS does not make for a generally accuarate proxy for market value. I am by no means a statistician, the bulk of my conviction comes from realizing how inaccurate the earnings number (and even more so the EPS number) can be in revealing the actual performance of a company (NSCP is a recent poster child of this concept - believe it or not, NSCP is one of the few companies that have a high correlation between EPS and market value). This coupled with the simple observation of the inaccuracy of sell side analyst estimates in predicting share price performance led me to run the numbers myself. Using the simple linear correlation formula, I ran nearly every publicly traded stock in the US over 10 million dollars in capitalization, and my beliefs received further conviction.