<FOOLISH WORKSHOP>

Reasonable Runaways

by Jim Stevens ([email protected])

Burlington, VT (Dec. 24, 1998) -- A number of readers have written in to ask if I could do an update of Robert Sheard's adaptation of James O'Shaughnessy's Reasonable Runaway screen. I don't know if these readers have been bad or good, but since their stockings were hung with care, it's the jolly thing to do!

Mr. O'Shaughnessy, who from what I've read was granted rare access to the vast Standard & Poor's historic database of security prices and fundamentals, has found some screens that he says have been quite successful in long backtesting. His last two books, What Works on Wall Street and How To Retire Rich are great stuff for us mechanically inclined investors.

One of the screens Jim suggested -- Reasonable Runaways -- was adapted by Workshop founder Robert Sheard by running it on the 1700 stock Value Line Investment Survey universe.

It goes like this -- starting with companies that sport a market-cap of $150 million or more, reduce the field to stocks with a price-to-sales ratio of less than one. Finally sort the remaining stocks by relative strength. (Robert Sheard used the stock's previous 6-month total return.) Here are the top twenty U.S. companies making the screen as of last week's Value Line, listed in order of 26-week total return rank:

Micro Warehouse <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MWHS)") else Response.Write("(Nasdaq: MWHS)") end if %>
Read-Rite <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: RDRT)") else Response.Write("(Nasdaq: RDRT)") end if %>
Dycom Inds. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DY)") else Response.Write("(NYSE: DY)") end if %>
Genovese Drug 'A' <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: GDXA)") else Response.Write("(AMEX: GDXA)") end if %>
Bindley Western <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BDY)") else Response.Write("(NYSE: BDY)") end if %>
Owens & Minor <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: OMI)") else Response.Write("(NYSE: OMI)") end if %>
SCI Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SCI)") else Response.Write("(NYSE: SCI)") end if %>
Best Buy Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BBY)") else Response.Write("(NYSE: BBY)") end if %>
TRICON Global Rest. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: YUM)") else Response.Write("(NYSE: YUM)") end if %>
Amer. Stores <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ASC)") else Response.Write("(NYSE: ASC)") end if %>
IBP Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IBP)") else Response.Write("(NYSE: IBP)") end if %>
U.S. Foodservice <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: UFS)") else Response.Write("(NYSE: UFS)") end if %>
Eagle Hardware <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: EAGL)") else Response.Write("(Nasdaq: EAGL)") end if %>
CILCORP Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CER)") else Response.Write("(NYSE: CER)") end if %>
Bombay Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BBA)") else Response.Write("(NYSE: BBA)") end if %>
Ruby Tuesday <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RI)") else Response.Write("(NYSE: RI)") end if %>
Consol. Freightways <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CFWY)") else Response.Write("(Nasdaq: CFWY)") end if %>
Scholastic Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SCHL)") else Response.Write("(Nasdaq: SCHL)") end if %>
SpaceLabs Medical <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SLMD)") else Response.Write("(Nasdaq: SLMD)") end if %>
Western Digital <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WDC)") else Response.Write("(NYSE: WDC)") end if %>

I remember reading some posts on the Foolish Workshop Message Board where readers were keeping track of an old twenty stock Reasonable Runaway list from early 1998. If anyone has been tracking this screen drop me an email and I'll share those results in my next Runaways update.

Time to hit the eggnog for this elf. Cheers!

Check out the latest file updates for the Workshop:
New Rankings | 1998 Returns | New Database