Message-ID: <3409713.1075857095505.JavaMail.evans@thyme> Date: Tue, 12 Dec 2000 07:30:00 -0800 (PST) From: wscfeedback@wallstreetcity.com To: alewis@ect.enron.com Subject: Searching for January Effect Hopefuls Mime-Version: 1.0 Content-Type: text/plain; charset=ANSI_X3.4-1968 Content-Transfer-Encoding: quoted-printable X-From: WSC-Analysis X-To: "ALEWIS@ECT.ENRON.COM" X-cc: X-bcc: X-Folder: \Andrew_Lewis_Dec2000\Notes Folders\All documents X-Origin: Lewis-A X-FileName: alewis.nsf In Search of Winning Stocks This Week: Searching for January Effect Hopefuls 1. Searching for the Year's Best Nasdaq Stocks 2. Search Criteria 3. One January Effect Hopeful 4. Disclaimer ***********************Our Sponsor************************* Learn Proven Trading Techniques from a Wall Street Pro If you are interested in learning the specific trading techniques that generated consistent profits for the top trader for Fidelity Capital Markets, click here to take advantage of a unique and timely opportunity. http://subs.wallstreetcity.com/c/go/XTRO/WSCE-xtroTA2?s=3DS201&D=3DXWSC ********************************************************** Wall Street City=01,s Stock Search of the Week 1. Searching for January Effect Hopefuls The "January Effect" is an oft-discussed phenomenon that occurs when stocks that have sold off near the end of one calendar year outperform the broader markets at the beginning of the following year. Typically, these stocks decline late in the calendar year due to tax selling, but are repurchased after the wash sale period expires. Candidates for an early calendar year rebound are often those stocks with favorable fundamental characteristics. January Effect Hopefuls is a search strategy that screens for such candidates. Primary criteria include a negative 26-week return and a market capitalization of between $50 - $750 million. The January Effect tends to occur more often with small to mid-cap stocks than it does with large-cap stocks. Utilizing the current ratio and debt-to-equity criteria in the restrictive mode screens for balance sheet strength. Companies with high current ratios and low debt-to-equity ratios have lower levels of financial risk. The two revenue percentage change criteria screen for companies with acceleration in their quarterly revenue growth rates. Positive forecast earnings growth is then sought to improve the chances that the companies will continue their growth trends in the future. As a final criterion, positive earnings surprises are sought for the past four reported quarters; companies that have a history of exceeding analysts' expectations tend to outperform their peers. Though the search strategy is designed with the January Effect in mind, it works well throughout the year for investors who follow contrarian strategies. Investors who are eyeing the results with the January Effect in mind should note that back testing showed material divergences in individual stock returns, therefore, selecting a basket of securities instead of one or two stocks may reduce risk. Click below to see the results. http://clyde.investools.com/T/A24.133.320.1.42265 2. Search Criteria Using WallStreetCity=01,s ProSearch tool, investors can build a search like the one below created by WallStreetCity analysts to find stocks that potential candidates for a January Effect rebound. Indicator Mode ------------------------------------------------------------ Rel Performance 26 Wk Between 0.0 - 99.0 Market Capitalization Between 50.0 - 750.0 Current Ratio Between 2.0 - 1000.0 Debt/Equity Ratio Between 0.0 - 50.0 Rev. Increase Last Qtr Between 102.0 - 10000.0, High Rev. Increase 2 Qtr ago Between 101.0 - 10000.0 Proj EPS Next FY Between 1.0 - 1000.0, High EPS Surprise Pos Last 4 Between 4.0 - 4.0 Investors can click below to view screen results. http://clyde.investools.com/T/A24.133.320.2.42265 3. One January Effect Hopeful Shares of Globespan {GSPN} declined by 70 percent during October and November. The decline was caused by the mass exodus out of tech stocks, profit warnings from Lucent {LU} - a major customer - and comments out of Cisco {CSCO} - also a customer - that it would be reducing inventory. Despite these market events, GSPN has not issued a profit warning and Bloomberg News Services is reporting that an analyst with Morgan Stanley Dean Witter is predicting that GSPN will meet revenue forecasts in 2001. Though GPSN, a developer of DSL integrated circuits, continues to trade a P/E ratio untypical of many January effect candidates, the extent of the decline could be more than enough to buffer the stock from a potential earnings warning, creating the possiblity of a bounce in 2001. Click below to view screen results. http://clyde.investools.com/T/A24.133.320.3.42265 ***********************Our Sponsor************************* These 8 Fiber-Optics Can Change Your Financial Future! Spending on fiber is soaring -- it's the only practical way telecoms can handle exploding Internet traffic. Fiber will create "a new class of millionaires," says Don Rowe. His top 8 all have robust sales, earnings, fundamentals. FREE trial: http://www.investools.com/c/go/WALL/WSCE-wallTR2?s=3DS600 ********************************************************** 4. Disclaimer WallStreetCity=01,s Stock Search of the Week is published solely for informational purposes and is not a solicitation or an offer to buy or sell any stock, mutual fund or other security. The information obtained from internal and external sources is considered reliable, but has not been independently verified for accuracy and completeness. WallStreetCity, its employees, and/or officers and directors, may from time to time have a position in the securities mentioned and may sell or buy such securities. Trading involves risk, including possible loss of principle and other losses. Trading results may vary. No representations are being made that these techniques will result in or guarantee profits in trading. Past performance is no indication of future results. 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