The Motley Fool: The Foolish Workshop

The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY. (Aug. 27, 1997) -- Continuing my recent focus on Relative Strength with large-cap stocks, I thought I'd widen the field today and bring in additional large-cap stocks from outside the Dow. Using data dated from August 20, here are a series of screens based on market capitalization and relative price performance.

Using the 100 largest American stocks, here are the top ten based on total return over the past year:

516% Dell Computer (DELL)
285% Applied Materials (AMAT)
169% Texas Instruments (TXN)
161% Compaq Computer (CPQ)
161% Warner-Lambert (WLA)
145% Intel (INTC)
140% Microsoft (MSFT)
136% Merrill Lynch (MER)
131% Lucent Technologies (LU)
123% Travelers Group (TRV)
110% Morgan Stanley Dean Witter (MWD)

Using the 100 largest American stocks, here are the top ten based on total return over the past six months:

134% Dell Computer (DELL)
98% Applied Materials (AMAT)
90% Compaq Computer (CPQ)
61% Warner-Lambert (WLA)
54% Sun Microsystems (SUNW)
53% Texas Instruments (TXN)
53% Wal-Mart (WMT)
53% Caterpillar (CAT)
51% Int'l Business Machines (IBM)
49% Home Depot (HD)

Using the 100 largest American stocks, here are the top ten based on total return over the past three months:

65% Dell Computer (DELL)
62% Sun Microsystems (SUNW)
62% Applied Materials (AMAT)
58% Compaq Computer (CPQ)
39% Texas Instruments (TXN)
37% Lucent Technologies (LU)
37% Warner-Lambert (WLA)
35% Banc One (ONE)
34% Morgan Stanley Dean Witter (MWD)
33% Medtronic (MDT)

Of those 100 largest American stocks, Value Line ranks 37 of them with Timeliness rankings of either 1 or 2. If we limit the field to these 37 stocks and then perform the same screens, here are the results.

Of the 100 largest American stocks, those with Timeliness rankings of 1 or 2, sorted by total return (Relative Strength) over the past year:

Of the 100 largest American stocks, those with Timeliness rankings of 1 or 2, sorted by total return (Relative Strength) over the past six months:

Of the 100 largest American stocks, those with Timeliness rankings of 1 or 2, sorted by total return (Relative Strength) over the past three months:

65% Dell Computer (DELL)
62% Sun Microsystems (SUNW)
62% Applied Materials (AMAT)
58% Compaq Computer (CPQ)
39% Texas Instruments (TXN)
37% Warner-Lambert (WLA)
33% Medtronic (MDT)
31% Oracle (ORCL)
30% Computer Associates (CA)
29% Merrill Lynch (MER)

The question is whether this Relative Strength will continue, and does marrying this pure momentum screen with a screen like the Value Line Timeliness rankings work even better? It's no secret that I use the Value Line reports in my own investment decisions and that I'm a big fan of large-cap stocks, but a combination of approaches may work quite well. I'll report back on these groups in the future. Fool on!

Monthly Growth Screens
(Jan. 3 to present)
74.16%  Relative Strength  
32.55%  Investing for Growth  
24.59%  YPEG Potential  
22.15%  S&P 500 Index  
20.08%  Low Price/Sales  
19.96%  EPS Plus RS  
12.89%  Unemotional Growth  
10.36%  Formula 90  

Annual Value Screens
(Jan. 1 to present)
22.92%  Dogs of the Dow  
20.77%  Dow Jones Ind Avg  
18.44%  Beating the S&P  
17.85%  Dow Combo  
17.19%  Unemotional Value  
17.19%  Beating the Dow  
10.06%  Foolish Four