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No. of Recommendations: 4
Hello GGers:

I was thinking today about the great resource we have with the MI screens published weekly, and how we can use this resource to indentify young Gorillas worthy of our investment $$$.

I posted a report on some of the screens that in my opinion yield the best chances of finding emerging Rule Breakers and Young Gorillas, as well as Rule Maker stocks.

Unintended Uses for MI
http://boards.fool.com/Message.asp?mid=13177656

I also expanded on this theme in the KP board by posting a complete list of MI screens that fit each search category.

Mining for Winners with MI
http://boards.fool.com/Message.asp?mid=13179637

Maybe MI will yield new project hunt candidates in SI, who knows?

-xerohype
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No. of Recommendations: 2
I was thinking today about the great resource we
have with the MI screens published weekly, and how we
can use this resource to indentify young Gorillas
worthy of our investment


I agree Xerohype. MI screens are a great hunting
ground. Just off the top of my head, here are a list
of companies which last year came across the MI screens
early...

UNPH, and then JDSU
QCOM
IRF
PMCS
GMST
NT
TXN
ORCL
NTAP
SEBL

and many more which we are intimately familiar with.

Here is a list of rankings archives and returns:
http://www.fool.com/workshop/2000/data2000.htm

And here are the current rankings for two of the more famous MS screens:


Relative Strength-IBD EPS RS
1 i2 Technologies ITWO 98 99
2 Newport Corp. NEWP 97 99
3 Lamson & Sessions LMS 77 99
4 Network Appliance NTAP 99 98
4 Rambus Inc. RMBS 99 98
6 Quest Diagnostics DGX 98 98
7 PMC-Sierra PMCS 96 98
8 BEA Systems BEAS 77 98
9 ADC Telecom. ADCT 99 97
10 Plexus Corp. PLXS 98 97
10 Siebel Systems SEBL 98 97

PEG26
1 Caremark RX CMX
2 Lamson & Sessions LMS
3 AnnTaylor Stores ANN
4 Talbots Inc. TLB
5 Quest Diagnostics DGX
6 SEI Investments SEIC
7 IMPATH Inc. IMPH
8 Plantronics Inc. PLT
9 ADC Telecom. ADCT
10 Plexus Corp. PLXS


A nice place to start searching for ideas.

DP
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No. of Recommendations: 2
Maybe MI will yield new project hunt candidates in SI, who knows?

Problem isn't a dearth of Hunt candidates, but a dearth of able and willing Hunters...

tekboy@stillwaitingfortheITWOreport,forexample.edu


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<<Problem isn't a dearth of Hunt candidates, but a dearth of able and willing Hunters...>>

Halfway through the Gorilla Game. Once done, I intend to tackle Inside the Tornado and Crossing the Chasm. Meanwhile I am going to spend time going through previous TMF and SI Gorilla board posts.

So armed, I will gladly join this band of hunters. I just need some time to get up to speed.

Chris
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No. of Recommendations: 1
Maybe MI will yield new project hunt candidates in SI, who knows?

Problem isn't a dearth of Hunt candidates, but a dearth of able and willing Hunters...


Hello all....I don't post much here...but I never miss a message....

.....I spend most of my time on The Mechanical Investing Board trying to develop new stock screens.

I am very interested in using MI techniques to flesh out young Gorillas (or Gorillas-to-be). We've had at least some luck doing so over the past 2 years.

What I would like help with it developing parameters that can be used to screen against one of the available stock-info databases. By necessity, these parameters must be quantifiable (for example: pick stocks with Revenue Growth greater than "X" over last quarter)....as opposed to subjective.

Given these, I can try and construct some trial screens. So, I would be very appreciative of input on which criteria/filters Gorilla-Gamers believe are the most significant....and I think this would be the best venue to discuss their merits.

Alan
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No. of Recommendations: 2

What I would like help with it developing parameters that can be used to screen against one of the available stock-info databases. By necessity, these parameters ust be quantifiable (for example: pick stocks with Revenue Growth greater than "X" over last quarter)....as opposed to subjective.


Alan, The obvious screen is for hypergrowth. This we have discussed here before. This entails revenue growth q over q and year over year >=100%.

Beyond that it becomes very difficult to quantify what makes up a Gorilla or potential Gorilla/King on paper. I'd stress Rule Maker and Toll Taker characteristics, such as rising margins, falling DSO's, and low flowies.

One of the inherent difficulties here is gorillas of different markets look very different on paper. For instance Microsoft's and Siebel's gross margins are indicative of the high margin software sector, while Intel and other chip makers many times are 15-35 points lower. Some businesses are more likely to produce a low flowie.

I'm sure others can contribute good ideas to screen for too, but as I remember from the MI board we like to Keep-it-simple. You don't want to get too many variables in there, as you won't be able to backtest reliably.

I have a few screens I use to look for potential tornado markets. I'll be happy to share a few screens with you thru email, as I don't want to get too OT here.

Good luck.
Dan
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No. of Recommendations: 4
Padavona wrote:

The obvious screen is for hypergrowth. This we have discussed here before. This entails revenue growth q over q and year over year >=100%.

Well...that's what I thought.....and what I was afraid of. Value Line has hundreds of parameters on the companies it covers.....but no direct data on Revenue Growth....can you believe it??

Here is a list of nearly all the criteria that VL covers....anything here that might be worthwhile?? I will also check to see if other databases (MarketGuide, AAII, etc.) have numbers on Revenue.

...and, please...if members of this Board believe this is wasting bandwidth and should be conducted on the MI Board...don't hesitate to say so:

Company Name
Ticker Symbol
Industry
Timeliness Rank
Tim. Rank Chg
Performance Rank
Per.Rank Chg
Safety Rank
Technical Rank
Beta
Stock Price
Change
% Change
Time
Volume
Current EPS
EPS Trail 12 Mo
Current P/E Ratio
Relative P/E Ratio
Median P/E
P/E Trailing 12 Mo
Earnings Yield Trail 12 Mo
High Price 52-Week
Low Price 52-Week
Indicated Annual Dividend
Div'd Yield
Market Cap $ (Mil)
Fiscal Year End Date
Reported Annual Sales
Sales Trail 12 Mo
Gross Income
Gross Margin
SG & A Expenses
Operating Income
Operating Margin
Depreciation
Other Income
Income Before Taxes
Net Income
Net Income Trail 12 Mo
Profit Margin
Net Profit Margin Trail 12 Mo
Cash
Accounts Receivable
Inventories
Other Current Assets
Total Current Assets
Intangibles
Gross Plant
Accumulated Depreciation
Net Plant
Total Assets
Short-Term Debt
Accounts Payable
Other Current Liabilities
Total Current Liabilities
Working Capitial
Deferred Taxes
Long-Term Debt
Preferred Equity
Common Equity
Shareholders Equity
Total Capital
Common Shares Outstanding
Capital Spending
Cash Flow
Free Cash Flow
% SG & A to Gross Income
% SG & A to Sales
Income Tax Rate
Return on Sales
Return on Common Equity
Return on Shareholders Equity
Return on Total Assets
Return on Total Assets Latest Qtr
Return on Total Capital
% Retained to Common Equity
Dividend Payout
% All Divs/Net Inc Trail 12 mo
Current Ratio Latest Qtr
Quick Ratio Latest Qtr
% LTD/Capital
% LTD/Capital Latest Qtr
% Debt/Capital Latest Qtr
% Shr Equity to Total Assets
% Common Equity/Capital
ROE Latest Qtr
Sales per share
Cash Flow per share
Avg Basic Shares
Avg Diluted Shares
Basic Earn P/Sh
Diluted Earn P/Sh
Div'ds Declared per share
Book Value per share
Capl Spending per share
Price/Sales Ratio
% FCF/Price Latest Qtr
Avg Annual P/E Ratio
Avg Annual Dividend Yield
Price to Book Value Qtr
Price To Book Value
Est Annual Sales
Est Operating Margin
Est Depreciation
Est Net Before Taxes
Est Tax Rate
Est Net After Taxes
Est Profit Margin
Est Sales/Share
Est Cash Flow/Share
Est EPS Current Fiscal Year
Est EPS Next Fiscal Year
Est Dividends/Share
Est Book Value/Share
Est Long-Term Debt
Est Shareholders Equity
Est Return on Total Capital
Est Return on Shareholders Equity
Sales Growth 1-Year
Sales Growth 5-Year
Sales Growth 10-Year
Cash Flow Growth 1-Year
Cash Flow Growth 5-Year
Cash Flow Growth 10-Year
EPS Growth 1-Year
EPS Growth 5-Year
EPS Growth 10-Year
Dividend Growth 1-Year
Dividend Growth 5-Year
Dividend Growth 10-Year
Book Value Growth 1-Year
Book Value Growth 5-Year
Book Value Growth 10-Year
Quarter End Date
Sales Latest Qtr
Depreciation Latest Qtr
Net Income Latest Qtr
EPS 10Q Latest Qtr
Dividend Latest Qtr
Inventories Latest Qtr
Current Assets Latest Qtr
Curr Assets/Share Latest Qtr
Current Liabilities Latest Qtr
Long-Term Debt Latest Qtr
Preferred Equity Latest Qtr
Common Equity Latest Qtr
Shareholders Equity Latest Qtr
Common Shares Outstg Latest Qtr
Working Capital Latest Qtr
Gross Billings Latest Qtr
Total Deposits Latest Qtr
Bank SL Loans Latest Qtr
Bank SL Deposits Latest Qtr
Insurance Premiums Latest Qtr
Loans
Loan Loss Provisions
Benefits and Reserves
FHLB Advances
Net Interest Income
Non-interest Income
Mortgage Loans per share
Savings Deposits per share
% Interest Income
% Interest Cost to Gross Income
% Loans to Total Assets
Premiums
Insurance in Force
Investment Income
Total Premiums per share
Underwriting Inc per share
Investment Inc per share
% Expense to Premiums Written
% Loss to Premiums Earned
% Commissions
% Investment Banking
% Principal Transactions
% Other Revenue
Number of Stores
Inventory Turnover
% Price Change Last Trading Day
Total Return 1-Week
Total Return 4-Week
Total Return 13-Week
Total Return 26-Week
Total Return YTD
Total Return 1-Year
Total Return 3-Year
Total Return 5-Year
Total Return 10-Year
Total Return 1999
Total Return 1998
Total Return 1997
Total Return 1996
Total Return 1995
Total Return 1994
Total Return 1993
Total Return 1992
Total Return 1991
Total Return 1990
Relative Strength 1 Week
Relative Strength 1 Month
Relative Strength 3 Months
Volume Last Trading Day
Avg Trading Volume Last 2 Weeks
Avg Trading Volume Last Month
Avg Trading Volume Last 3 Months
Avg Trading Volume Last 6 Months
Avg Trading Volume Last Year
Liquidity Ratio
Short Interest
Short Interest Ratio
Beta 3-Year
Beta 5-Year
Beta 10-Year
Std Dev 3-Year
Std Dev 5-Year
Std Dev 10-Year
1 Day Money Flow
1 Week Money Flow
1 Month Money Flow
EPS Latest Qtr End Date
EPS Latest Qtr
EPS 1 Qtr Ago
EPS 2 Qtrs Ago
EPS 3 Qtrs Ago
Est % EPS Chg Fiscal Year
Est % EPS Chg 1 Qtr Out
Est % EPS Chg 2 Qtrs Out
% EPS Chg from Last Qtr
% EPS 12-Month Chg Latest Qtr
Expected Reporting Date
Est By
Est EPS 1st Qtr Out
Est EPS 2nd Qtr Out
Est EPS 3rd Qtr Out
Est EPS 4th Qtr Out
Proj 3-5 Yr EPS
Proj 3-5 Yr % Price Change
Proj 3-5 Yr % Annual Total Return
Proj Sales Growth Rate
Proj Cash Flow Growth Rate
Proj EPS Growth Rate
Proj Dividend Growth Rate
Proj Book Value Growth Rate
Proj 3-5 Yr P/E
Proj 3-5 Yr Relative P/E
Proj 3-5 Yr Dividend Yield
Current Dividend
% Current Yield
Earnings Predictability
Financial Strength
Growth Persistence
Price Stability Rank

Alan

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No. of Recommendations: 3
Al,

Wow! That's a heck of a list of items for screening. You might be better off checking in here for candidates. <ggg> However, there are some items on that list that might help at least rule out things that are not candidates. First, as you said the subjective items are not going to plug into a screen. Boy, if you could get a screen to run these six criteria.....

A potential GG company must meet these criteria:

1. Discontinuous innovation
2. Proprietary open architecture
3. High barriers to entry
4. High switching costs
5. Strong value chain formation
6. Tornado market exists or foreseeable

I would suggest at least the basics of:

• four letter ticker symbols only
• projected sales growth rate
• Sales Growth 1-Year
• industry/segments must be high technology only

along with any combination that might fit your knowledge. Early candidates will have N/A for the P/E ratios, then once the profits start to come in these P/E's will be very high as compared to a more mature technology company. Perhaps there is some way to screen for that, I don't know.

It sounds like an interesting exercise, but I'm afraid the criteria I list above might be more telling in the early to mid stages than anything a screen might be able to identify. If you study the 'game' closely enough, you'll understand just why that is. Probably best to identify as soon as possible new companies that crop up and what industry their technology targets. Why? Because a gorilla game evolves due to a 'problem' that needs to be 'fixed' by some sort of technology solution. These target niches are what causes new companies and niche segments to crop up in the first place. In that sense, for the early candidates, perhaps screening for companies that are one month to one year old. After that, the market pretty much knows and is well aware of their technology and position in their segment and will be talked about on various boards including this one.

BB

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I would suggest at least the basics of:

• four letter ticker symbols only


Bruce,

Why is this? No company on the NYSE will ever be able to play the gorilla game?

Thanks,
Shawn
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No. of Recommendations: 0
Bruce,

Thanks for your quick feedback!

I realize that finding just Gorillas is out of the realm of a pure Mechanical methodology....but I guess I hope to find some way of identifying early on companies that deserve more due diligence....or Gorilla Research.

For example, in 1998 CREE, NTAP, and JDSU (then UNPH) appeared on a screen I was working on (not that these 3 are clear-cut Gorillas by any means)....well before I had ever even heard of such companies.

I suppose I'm hoping for a way to narrow down the list of stocks that merit a further look.

I'll see what I can do with the criteria you mentioned.

Alan
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No. of Recommendations: 3
OK Al. I have the ULTIMATE Relative Strength screen for you. I'd anywhere from a 3 month hold to a 10 year old. Rather than using Valueline, choose from a list of these 34 companies:

http://www.nextgenerationnetworks.com/coverage/index.htm

Sort by relative strength -or- market cap. Buy the top 5. Seeing that this list has been up for awhile, you could backtest the last year and compare it to your own RS screens.

I'm serious. I bet this will kick RS-IBD's arse.

DP
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No. of Recommendations: 1

Bruce,

Why is this? No company on the NYSE will ever be able to play the gorilla game?


1. I
2. R
3. F

That's only 3 letters. The screen failed us! <ggg>
Perhaps if you screened for companies operating in San Diego?

DP
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No. of Recommendations: 4
IRF: Now there's at least a 30 year old company I've never heard of before!

Why is this? No company on the NYSE will ever be able to play the gorilla game?

No, but the majority are on the Nasdaq in the early stages. SAP AKTIENGESELL is, of course, listed on the big board. However, they were already the gorilla years before the ADR's started trading under the symbol SAP in 1998. Then there's Nokia which started trading as an ADR in 1995 on the NYSE as well. Intel and Microsoft were added as Dow components well after their games were won as well. That leaves our lone King of EMC on the big board with SAP and NOK.

A few four letter words that are at least of some interest in one way or another?

INTC
MSFT
ORCL
CSCO
SEBL
QCOM
ARBA
ITWO
JNPR
RBAK
NTAP
BRCD
PSFT
RMBS
SNDK
SCMR
GMST
JDSU
SUNW
CMTN

There's a list twice as long of other candidates and players in various gorilla and royalty games.

That's not to say that a candidate couldn't be found on the big board, but the statistical odds are in favor of the other indice.

BB










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No. of Recommendations: 2
IRF: Now there's at least a 30 year old company I've never heard of before!

LOL. I don't care if they are 3000 years old. As long as they have patented technology for improving the power usage of cell phones, internet appliances, lap tops, and even desk tops, I'm interested. They won the design for the Intel P-4, and far as I know AMD is using their tech too. I don't know how you can make a >=1 gigahertz processor without IRF's power control.

And then there is their patented chips for improving vehicle mileage, currently around 10% and moving toward 20% soon. And of course their role in the Powercosm.

This is a mighty, mighty company. I cannot find a breakdown on paper, however I remember from some quick number crunching during their last conference call that their power chip technologies have entered the tornado (well over 100% growth accelerating) and is a growing portion of total revenue.

One worth looking into IMO.

DP
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No. of Recommendations: 2
As we know from the tier of gorilla gaming, once you get down to semiconductors - the game is a powerful one.

Thanks for the snapshot, Dan. I really don't know if I have any room in my portfolio for a value stock with such a low P/E of only 51. <ggg>

Not bad performance from a couple of seminconductor plays:

http://finance.yahoo.com/q?s=intc&d=my&c=IRF&y=on

BB
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BruceBrown said: • four letter ticker symbols only

Ummmmm, EMC? I guess they're more a Rule Maker (King?) than a Gorilla. Keep thinking Steve...
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Hi, Alan

I copied this out from the middle of your list:

Sales Growth 1-Year

Isn't that what you were looking for?

Terry
... happily eating a banana ...
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Thanks for the snapshot, Dan. I really don't know if I have any room in my portfolio for a value stock with such a low P/E of only 51. <ggg>


LOL. You should have seen the look on my face last week when I punched Brocade's numbers into my discount model, projected the growth rate I expected, and exclaimed, "This company is very undervalued - it's time to BUY!" Brocade took the place of Cisco in my portfolio, a move I feel comfortable with as Cisco remains a significant holding in my Roth mutual.

Yep, PE>500 and all. Brocade is undervalued. And if $30 billion becomes a reality by 2003, and they have a large portion of the market, today's price is a steal.
Sure is nice having long term holdings in Network Appliance and Brocade going into this new decade. And if I had any idea of the nonsense occuring this morning, I might have snagged Emulex around 1030 am edt.

Thanks for pointing out the nextgen networks site last year. You were definitely one of the first movers for exploring this opportunity. Much appreciated, just wish I had jumped a little sooner.

Now, if I only had some money leftover for Redback and Juniper...

DP

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BruceBrown said: • four letter ticker symbols only
Ummmmm, EMC? I guess they're more a Rule Maker (King?) than a Gorilla. Keep thinking Steve...

Actually, IBM was and still is the Gorilla of Mainframe computers and software for Mainframes.

Nortel (NT), Agilent (A) and Corning (GLW) have potential (?tornado, but no proprietary open architecture, yet).

You do know that the NYSE is saving the tickers M and I for our PC Wintel Gorillas.

Just thinking out loud,

-xerohype
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No. of Recommendations: 5
DP,

I know nothing about IRF other than the last few posts and I'm 'not looking' at it, but just wanted to ask a question to get anyone's thoughts who do follow the company. At their market cap, wouldn't it simply be a matter of petty cash for a larger semiconductor company to buy them? Contrary to the majority of my current investments, and Buckley knows this, I'm a small-cap investor at heart in my previous days. I actually always like to have a few small-cap investments, but I haven't been researching and shopping this year for a variety of reasons including every new company I'm interested in IPO's at the large-cap level! The most recent two under the small-cap category that turned out well for me were i2 and Siebel, but they were new companies. IRF has been around for a number of years. Somebody mentioned 'hypergrowth', yet I saw no 100%+ y/y growth in that table. Do they have individual proprietary products experiencing that kind of growth in their product mix?

Thanks for pointing out the nextgen networks site last year. You were definitely one of the first movers for exploring this opportunity. Much appreciated, just wish I had jumped a little sooner. Now, if I only had some money leftover for Redback and Juniper...

It was my pleasure to share the work of one of our authors, Paul Johnson. If we look at the entire technology adoption life cycle of the IP/Broadband space to find out what is 'broken' and what needs to be 'fixed' which created these new technologies in the first place - I think it is 'safe' to say that the cycle has many, many years to go in the various categories. Some of them will be stronger than others, but that is nothing new to the previous gorillas of various cycles. There is absolutely no doubt that the early valuations and market attention to these candidates are no secrets to the markets. The majority of them are backed by the most respected VC firms, represented by slick consulting/marketing firms and really hit the road 'running'. I don't think we could say such optimism was on the radar in 1996 when a company like i2 or Siebel went public. Hence, they had the luxury of being small-caps at one time (and it was much more than a few quarters that kept them in the small and mid-cap range). Take a look at Ariba to see how optimism is earlier than just a few years ago. Ariba's market cap stands between i2 and Siebel. We could certainly try and justify why that is using gorilla gaming criteria, market growth opportunity and why all three companies have 'best of breed' products and have teamed with IBM.

In spite of valuations and head banging about the valuations of many of the companies, we have to think out into the longevity of the market opportunity which the 'network effect' applies to the gorillas that will win their spaces. No need to say that the risk/reward comfort level is not one that meets everyone's qualifications.

You mentioned the debacle with the financial terrorism attack on Emulex yesterday and what you felt may have been a 'missed' opportunity. The hoax did indeed have an effect on Emulex, QLogic, JNI as well as switch maker Brocade and the fibre channel space. I'm not sure that's the type of 'opportunity' that one needs to wait for over the long haul, but I do feel saddened for those investors that had their panic buttons hit and may have sold shares of all of those companies at their daily lows, who now may be forced to pay possible short term capital gains and are left wondering what hit them and hold no shares of the companies they had researched well and invested in. Perhaps the culprits that were behind the hoax should be hauled out every day for the next 30 years to ring the opening and closing bells at the NYSE using two distinct body parts that aren't known for their percussive attributes. <ggg>

BB

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Bruce,

Somebody mentioned 'hypergrowth', yet I saw no 100%+ y/y growth in that table. Do they have individual proprietary products experiencing that kind of growth in their product mix?

As you suggest it is one of their revenue streams that are showing hypergrowth. This thread answers that part.
http://boards.fool.com/Message.asp?mid=13165393

Taken from a link by, TheRubal, from the lively Powercosm board.
http://boards.fool.com/Message.asp?mid=13193861
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No. of Recommendations: 3
Hello Alan (alevine)

Here are some of the screening criteria from your list that I think would be helpful to construct an early GG screen:

Timeliness Rank
Industry
Market Cap $ (Mil)
Gross Margin
Price/Sales Ratio
Sales Growth 1-Year
Sales Growth 5-Year
Relative Strength 3 Months (? 1 year)
Proj Sales Growth Rate
Proj Cash Flow Growth Rate
Proj EPS Growth Rate
Growth Persistence

-----

BB's ideas for an early GG screen:
http://boards.fool.com/Message.asp?mid=13190692
A potential GG company must meet these criteria:
1. Discontinuous innovation
2. Proprietary open architecture
3. High barriers to entry
4. High switching costs
5. Strong value chain formation
6. Tornado market exists or foreseeable
I would suggest at least the basics of:
o four letter ticker symbols only
o projected sales growth rate
o Sales Growth 1-Year
o industry/segments must be high technology only
along with any combination that might fit your knowledge. Early candidates will have N/A for the P/E ratios, then once the profits start to come in these P/E's will be very high as compared to a more mature technology company. Perhaps there is some way to screen for that, I don't know.

-----

Let me go through these screening criteria and tie them in to early GG characteristics.

Timeliness Rank

I don't know if this fits into the GG equation, but a timeliness rank of <3 seems to be a good screening tool. This one can always be dropped if it fails to recognize early GG companies of the past when doing a backtest.

Industry
High tech, just as BB alluded to, GG is a game played onlky in tech, so possible industry segments would include:
Computer Hardware/Software, Electronics, Microprocessors, Wireless, Network Hardware/Software, Internet Software and Infrastrucutre and Enterprise Software.

I don't have the list of industries available, but it would be pretty easy to decide what industries to consider.

Market Cap $ (Mil)

Since we are looking for early Gorillas/Kings, maybe we can set the upper limit of Market Cap at $20 Billion. This can be adjusted lower or higher depending on the results of backtesting.

Gross Margin

I believe we are looking for companies with light business models, compatible with an open proprietary architecture, not ones selling commodity products, therefore I believe that high Gross Margins are essential. Maybe we can set Gross Margins above 40% as a goal.

Price/Sales Ratio

As Moore likes to point out, GG companies will have high Price/Sales ratios. This indicates that the market perceives that these companies are growing quickly and have high barriers to entry. Maybe we can screen for companies with Price/Sales greater than 10 (if these seems too low, amybe we can up it to 20).

Sales Growth 1-Year
Sales Growth 5-Year

Slaes growth for 1 year should be greater than 80% (100% for the tornado purists), if available the 5-year Sales Growth should be greater than 50% (Am I being too picky here?)

Relative Strength 3 Months (? 1 year)

High relative strength indicates momentum and that the stock has been "discovered" by Wall Street. RS>80 for 1 year seems reasonable.

Proj Sales Growth Rate

We want companies early in nthe growth curve, so this number should be at least 40%. I'm sure a lot of the next gen networkers will be growing at 50-100% year over year for the next 5-10 years.

Proj Cash Flow Growth Rate
Proj EPS Growth Rate

This one depends on how accurate the forcast is for these type of companies. I would say we screen for these two criteria to be over 20%, but if the forecast is flawed these two criteria can be dropped. Gorillas and Kings should have amazing cash flow and EPS growth rates going into the future (that's why we invest in these companies – duh!)

Growth Persistence

I'm not exactly sure what this is, but it looks good. We do want companies with sustainable growth.

Now the criteria for GG that is harder to measure, Discontinuous innovation, Proprietary open architecture and Strong value chain formation needs to be measured individually. I don't really know if there are any screen criteria that could possibly measure this.

Now, some sell rule ideas:
Sales growth projected falls to below 20%.
Market cap climbs above $100 billion (and Gorilla status has not been confirmed).
Timeliness Ranking goes to 4 or 5.
Price to Sales Ratio falls to below 10.

Any thoughts on the above?

I'm looking forward to the backtest results.

-xerohype
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No. of Recommendations: 1
<i.No company on the NYSE will ever be able to play the gorilla game?

For the record, there are some companies on the NYSE playing gorilla games. IBM is still the gorilla of main frames. Iomega is playing at least two gorilla games and not doing very well at either of them. GE is probably the gorilla of several if not more technologies. Etc., etc., etc. :)

--Mike Buckley
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I know nothing about IRF other than the last few posts and I'm 'not looking' at it, but just wanted to ask a question to get anyone's thoughts who do follow the company.

IMO, IRF is in a Gorilla/royalty game. The hypergrowth is not evident because IRF is transitioning between product lines. I don't think it'll show up on any hypergrowth screens for a couple more quarters. Here's a link to my analysis of IRF:

http://boards.fool.com/Message.asp?mid=13106934

Marv
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No. of Recommendations: 6
<Warning long post ahead>

I've been using Stockquest/Netscreen to screen for hypergrowth companies. Here's one I think you'll be interested in:

RSW (Relative Strength Workshop) >= 80
Price >= 7
{Sales%ChgPYQ}>=100.OR.{Sales%ChgTTM}>=100
Is In Set ({SectorCode},[TECHNO])

This screen filters down to (I'm highlighting the ones I know are candidates or established Gorilla/King/Godzillas, feel free to point out any that I missed):

ASWX Active Software, Inc.
ACTU Actuate Corporation
ADCT ADC Telecommunications
AEIS Advanced Energy Inds.
AGIL Agile Software Corp.
ALSC Alliance Semiconductor
AMAT Applied Materials
AMCC Applied Micro Circuits
ARBA Ariba, Inc.

ARTG Art Technology Group
ASMI ASM International N.V.
BLDP Ballard Power Systems
BHE Benchmark Electronics
BRDG Bridge Technology, Inc.
BRCM Broadcom Corporation
BVSN BroadVision, Inc.
BRCD Brocade Communications

BRKS Brooks Automation, Inc.
CAMP California Amplifier
CATS Catalyst Semiconductor
CTSC Cellular Technical Serv.
CENL Centennial Technologies
CRPB Cerprobe Corporation
CMRC Commerce One, Inc.
CMOS Credence Systems Corp.
CREE Cree, Inc. This is an bug in Market Guide, I know Cree doesn't have 100% growth
DIGX Digex, Incorporated
DIGL Digital Lightwave Inc.
ELNT Elantec Semiconductor
EMLX Emulex Corporation
EVNT eVentures Group, Inc.
EXDS Exodus Communications
EXTR Extreme Networks, Inc
FBCE Fibercore Inc.
FLEX Flextronics International
FEI Frequency Electronics
GMGC General Magic, Inc.
GSPN GlobeSpan, Inc.
GBIX Globix Corporation
HOTJ HotJobs.com, Ltd.
IVIS ICOS Vision Systems NV
INFA Informatica Corporation
INFY Infosys Technologies Ltd.
INKT Inktomi Corporation
INVX Innovex Inc.
ISSI Integrated Silicon Solut.
INRS IntraNet Solutions, Inc.
JDSU JDS Uniphase Corporation
JNPR Juniper Networks, Inc.

KEM KEMET Corporation
KLAC KLA-Tencor Corporation
KOPN Kopin Corporation
LSCC Lattice Semiconductor
LVEL Level 8 Systems, Inc.
LPTH LightPath Technologies
LJLB LJL BioSystem, Inc.
FLSH M-Systems Inc.
MWAV M-Wave, Inc.
MCTI Micro Component Tech.,Inc
MUSE Micromuse, Inc.
MU Micron Technology, Inc.
NANO Nanometrics Incorporated
NETE Netegrity, Inc.
NGRU netGuru, Inc.
NTIQ NetIQ Corporation
NTRO Netro Corporation
NTWK Netsol International
NTAP Network Appliance, Inc.
NVLS Novellus Systems, Inc.
NVDA NVIDIA Corporation
OAKT Oak Technology Inc.
OPMR Optimal Robotics Corp.
PKTR Packeteer, Inc.
PNDS Pinnacle Data Systems
PVTL Pivotal Corporation
PMCS PMC-Sierra, Inc.
PRSF Portal Software Inc.
PWER Power-One, Inc.
PWAV Powerwave Technologies
PRIA PRI Automation, Inc.
QSFT Quest Software, Inc.
ROBV Robotic Vision Systems
SNDK SanDisk Corporation
SATC SatCon Technology Corp.
SBEI SBE, Inc.
SIDY Science Dynamics Corp.
SDLI SDL, Inc.
SMTL Semitool, Inc.
SEBL Siebel Systems, Inc.
SSTI Silicon Storage Tech.
SVGI Silicon Valley Group
SSOL Smartserv Online, Inc.
SWCM Software.com, Inc.
TERN Terayon Communication Sys
TIBX Tibco Software, Inc.
TLGD Tollgrade Communications
TXCC TranSwitch Corporation
TRKN Trikon Technologies, Inc.
TMWD Tumbleweed Communications
TUTS Tut Systems, Inc.
VSEA Varian Semiconductor
VRSN VeriSign, Inc.
VRTS Veritas Software Corp.
VETX Vertex Interactive Inc.
VERT VerticalNet, Inc.
VSAT ViaSat, Inc.
VIGN Vignette Corporation
WGRD WatchGuard Technologies
WAVX Wave Systems Corp.
WEBT WebTrends Corporation
WSTL Westell Technologies Inc.
YHOO Yahoo! Inc.


If I limit the Market Cap to < $5 billion, it narrows down to this:

ASWX ACTU AEIS AGIL ALSC ASMI BHE BRDG BRKS CAMP CATS CTSC CENL CRPB CMOS
DIGL ELNT EMLX EVNT FBCE FEI GMGC GBIX HOTJ IVIS INFA INVX ISSI INRS KEM
KOPN LSCC LVEL LPTH LJLB FLSH MWAV MCTI NANO NETE NGRU NTIQ NTRO NTWK NVDA
OAKT OPMR PKTR PNDS PVTL PWAV PRIA QSFT ROBV SATC SBEI SIDY SMTL SSTI SVGI
SSOL TERN TLGD TXCC TRKN TMWD TUTS VSEA VETX VERT VSAT WGRD WAVX WEBT WSTL


If I then tighten the RSW requirement to > 90, it narrows to:

ASWX ACTU AGIL ASMI BRDG CAMP CATS CENL DIGL ELNT EMLX FBCE FEI GMGC IVIS
INFA ISSI INRS KOPN LSCC LPTH LJLB FLSH MWAV NANO NETE NGRU NTRO NTWK NVDA
OAKT PKTR PNDS PVTL PWAV QSFT ROBV SATC SBEI SIDY SSTI SVGI SSOL TLGD TXCC
TRKN TMWD TUTS VSEA VETX VERT WGRD

Marv
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Alan,

Have you tried to look into Free Cash Flow Growth? Is this testable, backtestable?

Idorius was doing some interesting work over at the L'Union fait la force board.

Klaus
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Klaus,

Unfortunately, Free cash Flow Growth is not available in the old Value Line data.....so I have no way of backtesting that parameter.

Alan Levine
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Alas, I have no means to backtest anything. I don't subscribe to Value Line or IBD.

I remember ldorius's FCF screen, but not too clearly. I do recall that it was not really a GG screen.

The screen created by bradhein looks much more promision from a MI standpoint though. It picked up a lot more confirmed GG candidates than mine did.

Marv
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Thanks for pointing out the nextgen networks site last year.


Please repost site.
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