The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY (January 22)

Scroll to the bottom for today's numbers for the Growth and Value Screens.

Blink and you'd miss it. In the last hour today, the market cratered amid program trading which was supposedly related to futures contracts and rumors that Federal Reserve Board Governor Susan Phillips spooked traders with cautious comments.

But the amazing thing is that a number of the Growth stocks we're tracking continued to soar. In most cases, good earnings reports are taken more seriously than Wall Street paranoia and what so-and-so might have said about what's-his-name's prediction that the cross-collateral after-dinner indicator of monitored sentiment futures is peaking.

Case in point today was Applied Magnetics <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: APM)") else Response.Write("(NYSE: APM)") end if %>. After posting earnings late yesterday in which profit tripled over the same period a year ago, APM soared 4 points yesterday afternoon to $45 and another $3 and change today. Since we began tracking these growth screens with the closing numbers on January 3, Applied Magnetics is now up nearly 60%!

Other stocks bucking the market's sell-off were Dell Computer <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: DELL)") else Response.Write("(NASDAQ: DELL)") end if %>, up 3.75%; SCI Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: SCIS)") else Response.Write("(NASDAQ: SCIS)") end if %>, up 5%; and ENSCO Int'l <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ESV)") else Response.Write("(NYSE: ESV)") end if %>, gaining 2.4%.

The Value stocks, however, were down almost across the board. Only General Motors <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GM)") else Response.Write("(NYSE: GM)") end if %> which held even, and Texaco <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TX)") else Response.Write("(NYSE: TX)") end if %>, which gained 1.3%, broke out of the general malaise.

Texaco reported what it characterized as "disappointing" earnings today, apparently missing First Call's estimate of $1.51 a share by a dime, but the analysts and traders must have seen or heard something in the conference call that piqued their interest for the stock to have gained on poor earnings in a big sell-off. Check out the Texaco message board where undoubtedly a range of opinions on the earnings statement has appeared already.

As a follow-up from yesterday's report on the five-year track record for a monthly Relative Strength screen, I was able to get those final five prices to complete the back test, and as I suspected, the difference to the overall returns were negligible. See the Workshop essay for Relative Strength to see the year-by-year returns from 1992 through 1996. The five-year compound rate was 20.68%.

For those of you playing the Thoroughbred Stock Challenge, the new entry form for February's game is up on the website and ready for your submissions. I will accept entries (based on the date and time-stamp provided by the server, so leave yourself some room for slow connections) up until the opening bell rings on Monday, February 3.

Monthly Growth Screens
     (Jan. 3 to present)
 22.23%  Relative Strength  
 16.98%  YPEG Potential  
 11.22%  Low Price/Sales  
  5.81%  Investing for Growth  
  4.73%  Unemotional Growth  
  3.95%  S&P 500 Index  
  3.24%  EPS Plus RS  

Annual Value Screens
     (Jan. 1 to present)
  5.15%  Dogs of the Dow  
  4.77%  Dow Jones Ind Avg  
  3.75%  Beating the S&P  
  2.10%  Dow Combo  
  0.77%  Unemotional Value  
  0.77%  Beating the Dow