<FOOLISH WORKSHOP>

Reasonable Runaways      

by Jim Stevens ([email protected])

Burlington, VT (March 4, 1999) -- Another update of one of the three experimental screens of 1999 is here. Tonight it's Reasonable Runaways. This model is an adaptation of a screening method suggested by James O'Shaughnessy, and we borrow the name from him as well. Of the three "not-tested" screens that I'm tracking this year, this one is off to the worst start. How bad? Well, as we speak, it's dead last on RCarr's "Scoreboard" post, which by the way is a great post RCarr graciously puts up once a week on the Foolish Workshop Message Board.

Of course we won't give up on this method because of two lousy months. With low price to sales ratio stocks, you'd expect a bit of a waiting game. It's way too early to conclude that the model has tripped us. I get some interesting mail about this particular screen. It ranges from "whoa, total dogs, wouldn't be caught dead holding those names" to "great info, there are some great undervalued stocks in there to look at for possible big turnarounds." Different strokes...

Our Reasonable Runaways, quite a bit different than the original model developed and tested by James O'Shaughnessy, is run based on information from The Value Line Investment Survey. The two major filters for the screen are a low price to sales ratio and strong 6-month total return.

Another filter of the screen is a minimum market cap of $150 million, so the stocks are somewhat liquid. From there, it's all stocks in Value Line with a price to sales ratio of less than one. Sort the remaining stocks by 26-week Relative Strength to get your list.

Here are the ones that made this screen as of the close on December 31, 1998, and their performance through March 3, 1999:

Micro Warehouse <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MWHS)") else Response.Write("(Nasdaq: MWHS)") end if %>          -46.40%
Read-Rite <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: RDRT)") else Response.Write("(Nasdaq: RDRT)") end if %>                -37.42%
Best Buy Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BBY)") else Response.Write("(NYSE: BBY)") end if %>                 52.85%
Owens & Minor <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: OMI)") else Response.Write("(NYSE: OMI)") end if %>               -20.24%
IBP Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IBP)") else Response.Write("(NYSE: IBP)") end if %>                    -22.96%
Amer. Stores <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ASC)") else Response.Write("(NYSE: ASC)") end if %>                -11.34%
TRICON Global Rest. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: YUM)") else Response.Write("(NYSE: YUM)") end if %>          24.19%
SCI Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SCI)") else Response.Write("(NYSE: SCI)") end if %>                 -41.02%
Genovese Drug 'A' <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: GDXA)") else Response.Write("(AMEX: GDXA)") end if %>          -14.47%
Bindley Western <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BDY)") else Response.Write("(NYSE: BDY)") end if %>              -0.76%
Apple Computer <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AAPL)") else Response.Write("(Nasdaq: AAPL)") end if %>           -16.49%
Eagle Hardware <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: EAGL)") else Response.Write("(Nasdaq: EAGL)") end if %>            15.77%
FDX Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FDX)") else Response.Write("(NYSE: FDX)") end if %>                     2.87%
Bergen Brunswig <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BBC)") else Response.Write("(NYSE: BBC)") end if %>             -22.94%
Kroger Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KR)") else Response.Write("(NYSE: KR)") end if %>                     1.65%
Fred Meyer <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FMY)") else Response.Write("(NYSE: FMY)") end if %>                    0.31%
Scholastic Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SCHL)") else Response.Write("(Nasdaq: SCHL)") end if %>          -9.09%
Ruby Tuesday <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RI)") else Response.Write("(NYSE: RI)") end if %>                 -12.06%
Union Camp <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: UCC)") else Response.Write("(NYSE: UCC)") end if %>                   -4.10%
Park Electrochemical <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PKE)") else Response.Write("(NYSE: PKE)") end if %>         -3.49%


                        All Twenty   -8.26%
                        Top 5       -14.83%
                        Top 10      -11.76%
                        Top 15       -9.11%

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