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Unemotional Growth Update      

by Jim Stevens ([email protected])


Burlington, VT (April 8, 1999) -- Time for my monthly update of the Unemotional Growth model. For those of you not familiar with the UG, it's a monthly traded stock screen developed by former Foolish Workshop writer Robert Sheard. It's been backtested or tracked since January 1, 1987.

Picking the stocks for Unemotional Growth is simple; you can do it without a computer or a lot of time. All you need are the current issues of The ValueLine Investment Survey and Investor's Business Daily. Start with the Value Line Timeliness #1 list of 100 stocks. The original backtest threw out any foreign domiciled stocks. With this list in hand, rank each one by its Investor's Business Daily "EPS" score. The top 5 or 10 are the Unemotional Growth stocks. Break ties with the IBD "Relative Strength" score.

Looking back a month to my latest Unemotional Growth report, we can see what the March UG stocks were. Here is how they performed over the March holding period:

Dell Computer <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DELL)") else Response.Write("(Nasdaq: DELL)") end if %>           -4.28%
Microsoft Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MSFT)") else Response.Write("(Nasdaq: MSFT)") end if %>         18.88%
Tellabs  Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TLAB)") else Response.Write("(Nasdaq: TLAB)") end if %>           19.11%
Network Assoc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NETA)") else Response.Write("(Nasdaq: NETA)") end if %>         -34.57%
Ryland Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RYL)") else Response.Write("(NYSE: RYL)") end if %>               -4.04%
Oracle Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ORCL)") else Response.Write("(Nasdaq: ORCL)") end if %>           -31.05%
Dycom Inds. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DY)") else Response.Write("(NYSE: DY)") end if %>                  9.28%
Waters Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WAT)") else Response.Write("(NYSE: WAT)") end if %>                6.66%
MiniMed Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MNMD)") else Response.Write("(Nasdaq: MNMD)") end if %>            14.73%
CDW Computer Centers <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CDWC)") else Response.Write("(Nasdaq: CDWC)") end if %>    12.35%
                                        UG 5       -0.98%
                                        UG 10       0.71%

A pair of poor performing stocks dragged the month down. With a five- or ten-stock model this can be a pitfall. This is one reason many Workshop investors like to spread their portfolio over more than a few stocks.

The Standard & Poor's 500 Index tacked on 1.43% during the same March time frame. Year-to-date, the UG5 return is -6.56% and the UG10 1999 return is now -8.94%. For 1999, from the first UG update to April's, the S&P 500 is up 5.25%.

We keep track of the long-term track record of the UG screen on the UG History page. Including the March numbers, the UG5 has returned 35.80% since 1987 and the UG10 26.40%.

From the most recent Workshop Rankings, here are the Unemotional Growth stocks for April 1999. Already a bad start to the month, with more bleeding from Network Associates on restated earnings, analyst downgrades, and shareholder lawsuits. Ouch! 

Amer. Eagle Outfitters <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AEOS)") else Response.Write("(Nasdaq: AEOS)") end if %>
Microsoft Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MSFT)") else Response.Write("(Nasdaq: MSFT)") end if %>
Dell Computer <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DELL)") else Response.Write("(Nasdaq: DELL)") end if %>
Chattem Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CHTT)") else Response.Write("(Nasdaq: CHTT)") end if %>
Network Assoc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NETA)") else Response.Write("(Nasdaq: NETA)") end if %>
Dycom Inds. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DY)") else Response.Write("(NYSE: DY)") end if %>
MiniMed Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MNMD)") else Response.Write("(Nasdaq: MNMD)") end if %>
Tellabs  Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TLAB)") else Response.Write("(Nasdaq: TLAB)") end if %>
Waters Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WAT)") else Response.Write("(NYSE: WAT)") end if %>
CDW Computer Centers <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CDWC)") else Response.Write("(Nasdaq: CDWC)") end if %>

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