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No. of Recommendations: 2
harmy,

Your spreadsheet gives a prediction of an 86% return for Ridley Corporation

The 86% (in the spreadsheets I sent you) was last years' return. Ridley was aroung $0.70 - $0.72 at end of July early August 2001. A year later it was around $1.30 to $1.35. It is included in the spreadsheets for statistical analysis only (to see how the method performed). The prediction for Ridley was $1.635 (15 times forecast EPS). It hasn't reached that yet, but it is still in this year's list. Incidentally, 15 times last years' earnings comes to $1.455 (15 x 9.7c). That's not far off the high in the 12 months -- $1.40 on the 12th of June.

Hope that helps.

I completely agree with your comments about direction of future earnings. That is why I pay attention to 2nd year forecasts as well. It is more promising if the second year forecasts predict further growth as well.

Anyone considering this method would be well advised to keep a close watch on earnings revisions, and do the numbers again. I would pay more attention to that than to the daily share price fluctuations.

Our little portfolio from post #4843 is up about 4% at the moment, but don't get too carried away yet. Lots of stocks have risen in the past week, probably due to increased confidence from those CEOs in the US who have signed off on their Annual Reports. What happens over the next six to twelve months will be more interesting.

Chris
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