The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY. (July 7, 1997)  Today starts the second half of our year in the Workshop. (No one ever accused us of being conventional ... or punctual.)

Actually, our update cycle takes place on the close of trading on the first Friday of each new month (or quarter, half-year, or year). In July, because Friday represented a market holiday, we use Thursday's closing values, whatever the last trading day was.

This month in the Unemotional Growth screen, there's an interesting dilemma that will undoubtedly bring in some e-mail so let me address it here today. There are two stocks tied for the fifth and final spot with identical EPS and RS rankings. How to choose?

In my historical research, I didn't break such ties. In months where there was a tie for the final spot, I simply included all six stocks (evenly weighted) to keep the results focused only on the variables I was testing (EPS and RS rankings). And in my ten-year historical file, I'll continue to include tied stocks to maintain a consistent result.

But for the workshop portfolio we started this year, I had to choose between the two stocks for completely mechanical reasons. The automated macro files we use to update the portfolio screens are sent sprawling into the abyss if I monkey with the number of stocks in each screen. So I had to make a choice between CORRECTIONS CORP <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CXC)") else Response.Write("(NYSE: CXC)") end if %> and PEOPLESOFT <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PSFT)") else Response.Write("(Nasdaq: PSFT)") end if %>.

Since the EPS and RS rankings are identical, I turned to the Accumulation/Distribution ratings, but they were identical as well (A). Lacking any real method for breaking such a tie, I just turned to the YPEG Potential and Corrections Corp won the day. (PeopleSoft's YPEG suggests it's over-valued.) I don't necessarily recommend this procedure for breaking ties. If I were buying a new UG portfolio, I'd probably just buy six stocks instead of trying to break the tie, but rather than wreak havoc on my spreadsheet macros for the Workshop, I made an expedient choice. Fool on!

Monthly Growth Screens
(Jan. 3 to present)
36.97%  Relative Strength  
21.95%  S&P 500 Index  
15.97%  Low Price/Sales  
 6.33%  Unemotional Growth  
 4.92%  Investing for Growth  
-5.09%  YPEG Potential  
-5.17%  EPS Plus RS  
-15.15%  Formula 90  

Annual Value Screens
(Jan. 1 to present)
21.87%  Dow Jones Ind Avg  
19.81%  Dogs of the Dow  
16.52%  Beating the S&P  
11.86%  Unemotional Value  
11.86%  Beating the Dow  
 9.94%  Dow Combo  
 4.14%  Foolish Four