The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY. (Oct. 17, 1997)

Scroll to the bottom for year-to-date Growth and Value Screen results.

All this week in the Workshop we've been discussing large-cap strategies. Today I'll wrap up the summary with an outline of my Keystone Portfolio.

The Keystone Portfolio begins with the 100 largest American stocks. To narrow that field quickly, I rely on the Timeliness rankings from Value Line, including only those stocks with rankings of 1 or 2. That usually leaves approximately thirty stocks. To decide among them, I rank the list by Total Return over the previous six months.

I've been following this approach off and on over the last year with very promising results. The current ten-stock portfolio, which wraps up at the end of this month, is up by 55% versus a gain for the S&P 500 Index of 35%. There's a gap in my historical data from November to March, so after this month's model closes out, the next one I have data for begins in April.

So far, the April 1997 portfolio is up 26% versus 18%. The May portfolio is up 25% versus 12%. The June portfolio is up 20% versus 7%. The July portfolio is up 11% versus -1%. The August portfolio is up 3% versus 5%. The September portfolio is flat versus a flat index return.

Another version, suggested by a reader recently, is the Limestone Portfolio, which is identical to the Keystone Portfolio except that it does not have a market-cap requirement; it includes all American stocks in the Value Line universe.

Today, the Keystone Portfolio top ten are:

Dell Computer (DELL)
Compaq Computer (CPQ)
Applied Materials (AMAT)
Computer Associates (CA)
Cisco Systems (CSCO)
Merrill Lynch & Co. (MER)
Schlumberger Ltd. (SLB)
AirTouch Communic. (ATI)
Texas Instruments (TXN)
Pfizer Inc. (PFE)

The current Limestone Portfolio top ten are:

Navistar Int'l (NAV)
Dell Computer (DELL)
Michael Foods (MIKL)
Compaq Computer (CPQ)
NACCO Inds. 'A' (NC)
Unisys Corp. (UIS)
System Software (SSAX)
ICN Pharmaceuticals (ICN)
Varlen Corp. (VRLN)
Corporate Express (CEXP)

The current Capstone Portfolio (100 largest, Timeliness of 1-5, Total Return over previous year) top ten are:

Dell Computer (DELL)
Quantum Corp. (QNTM)
Applied Materials (AMAT)
KLA-Tencor (KLAC)
Compaq Computer (CPQ)
EMC Corp. (EMC)
Texas Instruments (TXN)
ENSCO Int'l (ESV)
Schwab (Charles) (SCH)
Merrill Lynch & Co. (MER)

The current Investing for Growth order is:

Iomega Corp. (IOM)
Dell Computer (DELL)
Quantum Corp. (QNTM)
Sun Microsystems (SUNW)
Compaq Computer (CPQ)
Dollar General (DG)
Franklin Resources (BEN)
T. Rowe Price (TROW)
Claire's Stores (CLE)
Computer Associates (CA)

Have a Foolish weekend!

Monthly Growth Screens
(Jan. 3 to present)
83.59%  Relative Strength  
36.05%  Investing for Growth  
29.53%  EPS Plus RS  
26.22%  S&P 500 Index  
22.36%  Unemotional Growth  
22.13%  YPEG Potential  
17.99%  Formula 90  
17.97%  Low Price/Sales  

Annual Value Screens
(Jan. 1 to present)
27.43%  Dow Combo  
25.48%  Unemotional Value  
25.48%  Beating the Dow  
24.75%  Dogs of the Dow  
23.22%  Beating the S&P  
21.69%  Dow Jones Ind Avg  
19.12%  Foolish Four