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Jimbob
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Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
How to make money in the stock market. Part 1. Rule #2.
Rule 2 - Choose quality stocks!
Put the odds in your favor right from the start. Putting the greatest number of variables in your favor increases your chances for success on your trades. Finding undervalued stocks with positive earnings and strong growth potential is one variable that you can control right from the start. One tool I use is VectorVest http://www.vectorvest.com/ , which offers a quick look at a companies fundamental outlook. I put together my X_Dev watchlist based on stocks that score very high on VectorVest reports. I trade these picks based on a plethora of other rules including X_Dev.
My current watchlist includes:
CHTT (defense play)
DHB
EELN
GFI (defense play)
GSS (defense play)
HMY (defense play)
IST
RANGY (defense play)
SNIC
TEN
JimBob
http://www.vestorAnalytics.com
Here is a gold stock nearing an X_Dev buy signal. This one also has a high VectorVest rating:
JimBob
http://www.vestorAnalytics.com
Yes sir Dambo, I picked some up near the last buy signal.
I now own small positions in GSS, HMY and GFI, saving some powder in case they dip some more.
JimBob
http://www.vestorAnalytics.com
For all the new peeps to this board:
I like to run tests with X_Dev using junk stocks. Check out the fundamentals on this loser.
Setup view:
I started sim trading this one on 4-12-03, and here is my current trading view:
I picked this stock using one of the X_Dev scans on my site. If you want to see all the data for this stock and follow along to see how X_Dev handles it in the future, sign up for the free membership and you will find it by following the vestorPick link.
JimBob
http://www.vestorAnalytics.com
Here it is... wish I would have picked it up:
Maybe next time...
JimBob
http://www.vestorAnalytics.com
Hey Lou, I have HMY too. I am checking out the chart now, my X-Dev setup went to cash 4 days ago and this thing keeps climbing. The 200 MA is at 14.08 and some resistance around 13.82. I have a sell at 13.82 which has a chance of getting hit tomorrow. I also have GFI and GSS, GSS I am out at 2.23 X_Dev sell. I went to all cash per X_Dev on GSS but it moved higher over the following 3 days so I waited for the pullback and jumped in again.. This one has done well for me over the past month.
Another bearish signal today:
JimBob
http://www.vestorAnalytics.com
Here is one I am going after on Monday:
Tenneco Inc.
In-Depth Analysis
Business: TENNECO AUTOMOTIVE INC, (TEN) manufactures and sells automotive exhaust system parts and ride control products for the original equipment market and aftermarket, and packaging products for consumer and commercial markets;
Price: TEN closed on 5/9/2003 at $3.80 per share
Value: Value is a measure of a stock's current worth. TEN has a current Value of $6.12 per share. Therefore, it is undervalued compared to its Price of $3.80 per share. Value is computed from forecasted earnings per share, forecasted earnings growth, profitability, interest, and inflation rates. Value increases when earnings, earnings growth rate and profitably increase, and when interest and inflation rates decrease. VectorVest advocates the purchase of undervalued stocks. At some point in time, a stock's Price and Value always will converge.
RV (Relative Value): RV is an indicator of long-term price appreciation potential. TEN has an RV of 1.38, which is very good on a scale of 0.00 to 2.00. This indicator is far superior to a simple comparison of Price and Value because it is computed from an analysis of projected price appreciation three years out, AAA Corporate Bond Rates, and risk. RV solves the riddle of whether it is preferable to buy High growth, High P/E stocks, or Low growth, Low P/E stocks. VectorVest favors the purchase of stocks with RV ratings above 1.00.
RS (Relative Safety): RS is an indicator of risk. TEN has an RS rating of 0.77, which is poor on a scale of 0.00 to 2.00. RS is computed from an analysis of the consistency and predictability of a company's financial performance, debt to equity ratio, sales volume, business longevity, price volatility and other factors. A stock with an RS rating greater than 1.00 is safer and more predictable than the average stock in the VectorVest database. VectorVest favors the purchase of stocks of companies with consistent, predictable financial performance.
RT (Relative Timing): RT is a fast, smart, accurate indicator of a stock's price trend. TEN has a Relative Timing rating of 1.76, which is excellent on a scale of 0.00 to 2.00. RT is computed from an analysis of the direction, magnitude, and dynamics of a stock's price movements over one day, one week, one quarter and one year time periods. Once a stock's price has established a strong trend, it is expected to continue in that trend for the short-term. If a trend dissipates, RT will gravitate toward 1.00. RT will explode from bottoms, dive from tops, and reflect changes in price momentum. VectorVest favors the purchase of stocks with RT ratings above 1.00.
VST (VST-Vector): VST is the master indicator for ranking every stock in the VectorVest database. TEN has a VST rating of 1.38, which is very good on a scale of 0.00 to 2.00. VST is computed from the square root of a weighted sum of the squares of RV, RS, and RT. Stocks with the highest VST ratings have the best combinations of Value, Safety and Timing. These are the stocks to own for above average, long-term capital appreciation. VectorVest advocates the purchase of safe, undervalued stocks rising in price. The efficacy of this indicator was demonstrated in a study conducted at the University of Chicago which showed that high VST stocks outperformed the S&P 500 by 583.1% over the six year period from 1996 through 2002.
CI (Comfort Index): CI is an indicator which reflects a stock's ability to resist severe and/or lengthy price declines. TEN has a CI rating of 0.65, which is poor on a scale of 0.00 to 2.00. CI is quite different from RS in that it is based solely upon a stock's long-term price history. VectorVest advocates the purchase of high CI stocks.
GRT (Earnings Growth Rate): GRT reflects a company's one to three year forecasted earnings growth rate in percent per year. TEN has a forcasted Earnings Growth Rate of 20.00%, which VectorVest considers to be very good. GRT is computed from historical, current and forecasted earnings data. It is updated each week for every stock in the VectorVest database. GRT often foretells a stock's future price trend. If a stock's GRT trend is upward, the stock's price will likely rise. If GRT is trending downward, the stock's Price will probably fall. VectorVest favors the purchase of stocks whose GRT is rising and is greater than the sum of current inflation and interest rates, (8.36%).
Recommendation (REC): VectorVest gives a Buy, Sell, Hold recommendation on every stock, every day. TEN has a Buy recommendation. REC reflects the cumulative effect of all the VectorVest parameters working together. These parameters are designed to help investors buy safe, undervalued stocks rising in price. They also help investors avoid or sell risky, overvalued stocks falling in price. VectorVest recommends that investors buy high VST-Vector, Buy-rated stocks in rising markets.
Stop (Stop-Price): Stop is an indicator of when to sell a long position or cover a short position. TEN has a Stop of $3.03 per share. This is $0.77 below TEN's current closing Price. A stock's Stop is computed from a 13 week moving average of its closing prices, and is fine-tuned according to the stock's fundamentals. High RV, high RS stocks have lower Stops, and low RV, low RS stocks have higher Stops. In the VectorVest system, a stock gets a 'B' or 'H' recommendation if its Price is above its Stop and an 'S' recommendation if its Price is below its Stop.
EPS (Earnings per Share): EPS stands for leading 12 months Earnings Per Share. TEN has a forecasted EPS of $0.61 per share. VectorVest determines this forecast from a combination of recent earnings performance and traditional fiscal and/or calendar year earnings forecasts.
P/E (Price to Earnings Ratio): P/E is a popular measure of stock valuation which shows the dollars required to buy one dollar of earnings. TEN has a P/E of 6.23. This ratio may be deemed to be high or low depending upon your frame of reference. The average P/E of all the stocks in the VectorVest database is 53.83. P/E is computed daily using the formula: P/E = Price/EPS.
EY (Earnings Yield): EY reflects earnings per share as a percent of Price. EY is related to P/E via the formula, EY = 100 / (P/E), and may be used in place of P/E as a measure of valuation. EY has the advantages that it is always determinate and can reflect negative earnings. TEN has an EY of 16.10 percent. This is above the current average of 1.85% for all the stocks in the VectorVest database. EY equals 100 x (EPS/Price).
GPE (Growth to P/E Ratio): GPE is another popular measure of stock valuation. It compares earnings growth rate to P/E ratio. TEN has a GPE rating of 3.22. High growth stocks are believed to be able to justify high P/E ratios. A stock is commonly considered to be undervalued when GPE is greater than 1.00 and overvalued when GPE is below 1.00. Unfortunately, this rule of thumb does not take into account the effect of interest rates on P/E ratios. The operative GPE ratio of 1.00 is valid when and only when interest rates equal 10%. With long-term interest rates currently at 5.36%, the operative GPE ratio is 0.29. Therefore, TEN may be considered to be undervalued.
DIV (Dividend): VectorVest reports annual, regular, cash dividends as indicated by the most recent payments. Special distributions, one-time payments, stock dividends, etc., are not generally included in DIV. TEN does not pay a dividend.
DY (Dividend Yield): DY reflects earnings per share as a percent of Price. TEN does not pay a dividend, so it does not have a Dividend Yield rating. . DY equals 100 x (DIV/Price). It is useful to compare DY with EY. If DY is not significantly lower than EY, the dividend payment may be in jeopardy.
DS (Dividend Safety): DS is an indicator of the assurance that regular cash dividends will be declared and paid at current or at higher rates for the foreseeable future. TEN does not pay a dividend, so it does not have a Dividend Safety rating . Stocks with DS values above 75 typically have RS values well above 1.00 and EY levels that are much higher than DY.
DG (Dividend Growth Rate): Dividend Growth is a subtle yet important indicator of a company's financial performance. It also provides some insight into the board's outlook on the company's ability to increase earnings. TEN does not pay a dividend, so it does not have a Dividend Growth rating .
YSG (YSG-Vector): YSG is an indicator which combines DIV, DY and DG into a single value, and allows direct comparison of all dividend-paying stocks in the database. TEN does not pay a dividend, so it does not have a YSG rating . Stocks with the highest YSG values have the best combinations of Dividend Yield, Safety and Growth. These are the stocks to buy for above average current income and long-term growth.
Open: TEN opened trading at a price of $3.55 per share on 5/9/2003.
High: TEN traded at a High price of $3.80 per share on 5/9/2003.
Low: TEN traded at a Low price of $3.51 per share on 5/9/2003
Close: TEN closed trading at price $3.80 per share on 5/9/2003. (Close is also called Price in the VectorVest system)
Range: Range reflects the difference between the High and Low prices for the day. TEN traded with a range of $0.29 per share on 5/9/2003.
$Change: TEN closed up 0.35 from the prior day's closing Price.
%PRC: TEN's Price changed 10.14% from the prior day's closing price.
Volume: TEN traded 133,500 shares on 5/9/2003.
AvgVol: AvgVol is the 50 day moving average of daily volume as computed by VectorVest. TEN has an AvgVol of 163,700 shares traded per day.
%Vol: %Vol reflects the percent change in today's trading volume as compared to the AvgVol. %Vol equals 100 x (Volume/AvgVol). TEN had a %Vol of -18.46% on 5/9/2003
Sales: TEN has annual sales of $3,571,000,000
Sales Growth: Sales Growth is the Sales Growth Rate in percent over the last 12 months. TEN has a Sales Growth of 7.00% per year. This is good. Sales Growth is updated each week for every stock. It is often useful to compare Sales Growth to Earnings Growth to gain an insight into a company's operations.
Sales Per Share (SPS): TEN has annual sales of $89.28 per share. SPS can be used as a measure of valuation when comparing stocks within an Industry Group.
Price to Sales Ratio (P/S): TEN has a P/S of 0.04. This ratio is also used as a measure of valuation. Here, too, it is useful when comparing stocks within an Industry Group.
Shares: TEN has 40,000,000 shares of stock outstanding.
Market Capitalization: TEN has a Market Capitalization of $152,000,000. Market Capitalization is calculated by multiplying price times shares outstanding.
Industry Group: TEN has been assigned to the Auto & Truck (OEM) Industry Group. VectorVest classifies stocks into over 200 Industry Groups and 40 Business Sectors.
Business Sector: TEN has been assigned to the Auto & Truck Business Sector. VectorVest classifies stocks into over 200 Industry Groups and 40 Business Sectors.
Analysis Summary
TEN is undervalued compared to its Price of $3.80 per share, has somewhat below average safety, and is currently rated a Buy.
JimBob
http://www.vestorAnalytics.com
Here is my setup for GLG, Dambo.
I did not use the recommended 6 mo. time frame and when I do this I tend to use other TA for stops and targets too.
JimBob
http://www.vestoranalytics.com
By the way I am giving free vestorPlus access to all free members for the next few days so they can check out the new Primary Trend and notesPlus!!! pages.
Check it out.
Got ya Myst, I did not compensate for the trend change, here is my new setup in which I raised the lower band slightly. I don't know if I am looking at the Naz correctly but it looks to me that it broke parabolic support today. With that in mind maybe there is a chance for some selling presure even though SNIC is oversold. If it acts bullish tomorrow and the market is down I will reopt for Monday.
JimBob
http://www.vestorAnalytics.com
Already did:o)
This one is rated a buy from VectorVest.
JimBob
http://www.vestorAnalytics.com
Check this one out....
8:24am 05/01/03
Click Commerce to pay special dividend of $2.50 per shr (CKCM) By Michael Baron
Click Commerce (CKCM) is saying it plans to pay a special cash dividend of $2.50 per common share. The dividend will be paid June 4 to shareholders of record on May 20. "Declaring this $20 million special dividend reflects our board's confidence in the company's core software business and its growth opportunities, as well as the company's overall financial strength," said Michael Ferro, Chairman and CEO of the Chicago-based firm, in a press release. The company also said its board has ended consideration of an acquisition proposal previously submitted by Insight Venture Management, and that it has inked new employment agreements with Ferro, and Justin Dearborn, vice president, human resources and corporate legal affairs. The stock closed Wednesday at $2.79, up 2.5 percent.
AI
