Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: Jenna who wrote (12723)	8/8/1998 12:19:00 PM
From: Jenna	Respond to of 120523

First Among Fundamentals: Earnings, Sales William O'Neil, IBD's Chairman and founder discusses the importance of both fundamental and technical analysis to find winning stocks. I mentioned last weeks column. Here is a little about this week's installment in his series of "how to find winning stocks" O-Neil: We've found that strong sales and earnings were among the most important characteristics of winning stocks. You're looking for strong increases in quarterly sales and earnings compared to the same quarter the year before. You also want an acceleration in the rate of increase in the latest quarter over the previous quarter [ed.(this is parallel to the earnings acceleration criteria (from last quarter) and earnings velocity (from the same quarter last year) that we use in our Market Gems newsletter.] The examples were intriguing: SALES: In October 1986, six months after its initial public offering Microsoft's lates-quarter sales were up 68% and its earnings were up 75%. The earnings gain was its seventh in a row. In March 1982, six months after its IPO, Home Depot's earnings were up 140% in the most recent quarter. Sales in the most recent three quarters accelerated from 104% to 158% to 199% with the last nine quarters averaging 177%. In 1990, Cisco's systems' earnings were up in the prior nine quarters from 150% to 1,100% with the average being 443%.. This is what I mean when I refer to the sales and earnings power behind the biggest winners. EARNINGS: You should also look for growth in annual earnings a longer term indicator. Microsoft's annual growth rate was 99% at the point it took off in 1986, and Cisco's was 57% in 1990.. These leaders showed strong return on equity and healthy pretax profit margins. All of this happened before they went on to make their biggest price moves. My rule of thumb is: Look for ROES of 17% or higher [we do] This is perhaps the most important thing to look for: Look for bases building after price declines: These bases were formed specifically because of a decline or correction in the general market averages. In each case, when the market finally turned and was on a new uptrend, these leaders were the first stocks in the market to move [ed. comment: those are the ones on the watch lists]. These what I like to call our 'street beaters'.. I've often mentioned that these will be the first to rebound after a correction. We are seeing signs of that right now in the market place. Of course others rebound also as we see in the amount and kind of stocks appearing in Thomas's watch list, for example, which include some of the smaller cap stocks that have been hit and the excellent potential for a turnaround and/or continuation of gains of others like ISLI which have been great performers. All in all were it not for high fundamentals many of these stocks would never rebound. BOST is a good case in point and perhaps SOC or Z or Golden Books would be an example of others that will be hard-pressed to rebound.

To: Jenna who wrote (12723)	8/8/1998 5:36:00 PM
From: IQBAL LATIF	Read Replies (1) \| Respond to of 120523

Jenna- OFF TOPIC Hi, Long overdue congratulations from a friend for running a very open honest place offering a lot of opportunity.. On Investor's Business Daily picking your stocks, let me tell you straight without chewing any words on IBD these guys pick your posts, Jenna- and they don't have the politeness to say thank you- this is what WSJ CNBC all about, you talk of divergence of Europe with US markets it ends up in next few days as decoupling of Europe with US.I hope these hot shot journalists have little decency to give credit where they pick their info from. CNBC- if the markets are up they would be on the side of buying if the markets are dropping they would sell the markets. Pits always trade against what CNBC view is, imagine if you were in the pits and someone is talking the market down you will go long at your price. This is exactly what is happening- these financial journalists by producing 'Tabloids' type of financial information are helping the pits a lot. Imagine an electronic media which hypes up the volatility of the market the ultimate beneficiaries are Pits and end loser is the small guy who panics and get slaughtered or whip sawed. May be they are serving big money but I hope if they understand to report the movements in percentage terms instead of points, this would help the small investor who gets panicked with these extraordinary moves and enter and exit at wrong time. I always advise friends to take a opposite view to CNBC on short trades, one never lose money on SPU trading. The pits in their routine breakfast conclave have an unwritten agreement to punish these hot shot financial journalists. SPU trading is the most manipulative market they run stops on up side and down side financial journalism does best to help them achieve their goals albeit without any intention. At 1060 the pits went long and little did these CNBC guys realized that the market will come back with such a vengeance. In a bull trend to talk of bear market and dance Ralph Accompara as champion of bears reflected nothing but Sensationalisation and mediocrity of financial media. Last week was great example of these manipulations --I just wanted to tell you that I am not in so many stocks my universe is limited but I enjoy your professionalism and fundamental analysis they make sense and stack up to what I call serious analysis. For me, you are the market maker. Keep doing the good job-- You are one of the best. Hats off to you and your thread- it is one good place to highlight the fundamentals strengths of underlying equities. Sorry for disturbing you. Ike