To: P.E. Allen who wrote (7217 ) 6/13/1999 5:05:00 PM From: julius kluger Respond to of 108040
Positive things about EVSI William O'Neil Look at the quarterly EPS change (This quarter vs. same quarter last year) (PASS) : The EPS growth for this quarter relative to the same quarter a year earlier for EVSI, 167.7%, is above the minimum 18% that this methodology likes to see for a "good" growth company. EVSI would pass the first requirement. Look for confirmation of at least one other leading stock in the industry (PASS) : Make sure that a company's industry is attractive by confirming that at least one other company in the industry has a relative strength above 80. There is confirmation in EVSI's industry (Retail (Specialty)), as there are 24 companies that have a relative strength at or above 80. Look for leading industries (PASS) : Buy stocks in top performing industries. Look at the number of companies within an industry that have a weighted relative strength above 80, and choose only the top 30% of those industries from which to select stocks. In another method, look for industries with the most stocks making new 52-week highs. EVSI's industry (Retail (Specialty)) is currently one of the top performing industries, as it passes both of the aforementioned criteria. Look to see if Long-term Debt/Equity has been decreasing (PASS) : Companies who have consistently cut debt over the last 3 years, or who have no debt, are looked at favorably. EVSI, whose Debt/Equity for the last 3 years (from earliest to the most recent fiscal year) was 84.2%,75.7%, 22.9%, would pass this test. Look at the shares outstanding (PASS) : Shares outstanding should be less than 30 million, as fewer shares mean bigger price jumps when demand surges. However, large companies are as acceptable if all the other numbers check out. EVSI currently has 4 million shares outstanding, which is favorable. Look at the insider ownership (PASS) : Companies with the best prospects have strong insider ownership, which we define as 15% or more. When there is strong insider ownership, management is more likely to act in the best interest of the company, as their interests are right in line with that of the shareholders. Insiders own 54.0% of EVSI's stock. Management's representation is large enough and would pass this test. Look for something new and/or of major significance in the business: When investing in a company, this methodology looks for some new excitement taking place in the business. Look for the release of major new products or services, which are currently adding to revenues, the implementation of fresh top-level managment, or significant favorable changes in industry conditions. Unfortunately, we are unable to come to a conclusion on this variable, but check out the REESE REPORT for the latest developments on EVSI. Look at the institutional ownership (PASS) : Some institutional ownership is preferred, but there is no indication that a large number of institutions is too many. Institutions own 5.0% of EVSI's stock. Because there is some institutional ownership present, EVSI would pass this test.