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Spark 5 up 13%

by David Forrest ([email protected])

Shepherdstown, WV (Feb. 12, 1999) -- Have you seen this week's returns? Spark 5 is still kicking the market's butt, and Unemotional Growth and Low Price to Sales are still weak sauce -- the only two screens failing to match or exceed the Standard & Poor's 500 Index. I can't seem to put my finger on it, but there's something I just don't like about Low PSR, and it's not the weak performance. I guess I subscribe to the notion that price to sales is not a good gauge of value, even though O'Shaughnessy's work says otherwise. We'll keep following it, though.

As for Spark 5, our thoroughbred so far this year, it's up 17.58% as of yesterday's close. However, as many of you know, Dan Niles from BancBoston Robertson Stevens said that he believes revenues for Dell Computer <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DELL)") else Response.Write("(Nasdaq: DELL)") end if %> will fall short for this quarter. His estimate was for $5.5 billion, and he now is guessing $5.2 billion.

It appears that Mr. Niles is going out on a limb, though. Lisa Rapuano of Legg Mason says that Dell has not given guidance to anyone that they will miss the quarter. In fact, at the Goldman Sachs Technology conference, Michael Dell said he believes that while PC growth should slow to 17%, Dell will far exceed this in its growth. Now, that doesn't mean they won't miss estimates, but it does sound like the company is fairly confident about its future growth. I wonder what prompted Dan Niles to make this call?

All of this fundamental stuff aside, the market is hammering Dell, down more than $10 as we speak. Most other techs are getting slammed, too, which doesn't bode well for the rest of the Spark 5, at least in the short term. As of this moment, the Spark 5 is up 13.01%, down more than 4% for the day. Still not too shabby for what's started out as a very volatile year for investors.

Finally, next week I'll be toying with a variation on a screen that's being discussed on the web message boards. It builds on some stuff I mentioned earlier this year and basically asks the question: Is it a good idea to set up a portfolio of stocks that appear most often in the screens? More next week.

Best,
Bogey

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