Workshop Portfolio

<FOOLISH WORKSHOP>

Reasonable Runaways      

by Jim Stevens (JimStevens@aol.com)

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

All Twenty -8.26% Top 5 -14.83% Top 10 -11.76% Top 15 -9.11%
Well, what can I say? Aside from a couple of bright spots, these stocks are taking a beating. I ran the screen again on last week's Value Line data and here's the new list, in decreasing order of 6-month total return:

Oxford Health Plans (Nasdaq: OXHP)
MedPartners Inc.
(NYSE: MDM)
IKON Office Solution
(NYSE: IKN)
Airborne Freight
(NYSE: ABF)
Amer. Freightways
(Nasdaq: AFWY)
FDX Corp.
(NYSE: FDX)
Apria Healthcare
(NYSE: AHG)
Excel Inds.
(NYSE: EXC)
Station Casinos
(NYSE: STN)
Park Electrochemical
(NYSE: PKE)
Consol. Freightways
(Nasdaq: CFWY)
Southwest Gas
(NYSE: SWX)
Georgia-Pacific Group
(NYSE: GP)
Navistar Int'l
(NYSE: NAV)
Iomega Corp.
(NYSE: IOM)
Coherent Inc.
(Nasdaq: COHR)
Fred Meyer
(NYSE: FMY)
Enron Corp.
(NYSE: ENE)
NCR Corp.
(NYSE: NCR)
Circuit City Group
(NYSE: CC)

Here's hoping for some Foolish Runaways! Tune in next week for updates on the monthly UG and RS-IBD.

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


Workshop Portfolio


9/28/01 as of ~5:30:00 PM EDT

Ticker Company Price
Change
Daily Price
% Change
Price
AETAETNA INC NEW0.943.36%28.94
BABOEING CO(1.04)(3.02%)33.36
CATCATERPILLAR INC1.112.53%44.91
COGCABOT OIL & GAS 'A'0.693.59%19.90
DDDU PONT (EI) DE NEMOURS0.992.74%37.14
DGXQUEST DIAGNOSTICS(0.45)(0.73%)61.42
EKEASTMAN KODAK0.421.31%32.49
GMGENERAL MOTORS1.393.38%42.55
LHLABORATORY CORP AMER HLDG(NEW)1.141.42%81.21
MOPHILIP MORRIS COS(0.76)(1.55%)48.24
NEWPNEWPORT CORP0.261.90%13.97
NVRNVR INC(0.54)(0.38%)140.41
PKXPOHANG IRON & STEEL ADS1.097.51%15.61
PVNPROVIDIAN FINANCIAL1.075.64%20.04
QCOMQUALCOMM INC(0.40)(0.84%)47.16
RJRRJ REYNOLDS TOBACCO HLDGS(0.69)(1.19%)57.31
SLESARA LEE CORPUnchg.Unchg.21.09
UNFIUNITED NATURAL FOODS0.563.18%18.15
WMIWASTE MANAGEMENT(0.01)(0.04%)26.74

Overall Return -- total % Gained (Lost)
  Day Week Month Year
To Date
Since
Inception
(12/24/1998)
Workshop1.30%7.32%(12.02%)(20.66%)(18.91%)
Comparable S&P 500n/an/an/an/a(19.07%)
S&P 500 (DA)1.95%7.48%(8.33%)(21.22%)(14.88%)
NASDAQ2.02%4.71%(17.46%)(39.68%)(31.41%)
DJIA (DA)1.68%7.07%(11.07%)(17.86%)(2.22%)

Internal Rate of Return -- Annualized Rate of % Gained (Lost)
  Since Inception (12/24/1998)
Workshop(17.62%)
vs. S&P 500(17.63%)

Trade Date # Shares Ticker Cost/Share Price Total % Ret
1/8/0126MO40.9448.2417.82%
1/8/0122RJR50.1057.3114.39%
1/8/0167UNFI16.4518.1510.34%
12/24/9824CAT43.0844.914.24%
1/8/018NVR136.63140.412.77%
1/8/0140WMI27.4426.74(2.54%)
1/8/0150SLE22.5421.09(6.42%)
1/8/0161PKX17.8315.61(12.46%)
1/8/0115DD48.8337.14(23.95%)
1/8/0129AET38.1728.94(24.19%)
1/8/0139COG28.7519.90(30.79%)
1/8/0114QCOM75.5447.16(37.57%)
1/8/018LH134.6981.21(39.70%)
12/27/9918GM73.2642.55(41.92%)
1/8/0118BA59.5333.36(43.96%)
1/8/019DGX114.4961.42(46.35%)
12/27/9920EK65.0932.49(50.08%)
1/8/0120PVN55.5020.04(63.89%)
1/8/0115NEWP74.9613.97(81.36%)

Trade Date # Shares Ticker Total Cost Current Value Total Gain
1/8/0126MO$1,064.50$1,254.24$189.74
1/8/0122RJR$1,102.25$1,260.82$158.57
1/8/0167UNFI$1,102.12$1,216.05$113.93
12/24/9824CAT$1,034.00$1,077.84$43.84
1/8/018NVR$1,093.00$1,123.28$30.28
1/8/0140WMI$1,097.50$1,069.60($27.90)
1/8/0150SLE$1,126.88$1,054.50($72.38)
1/8/0161PKX$1,087.75$952.21($135.54)
1/8/0115DD$732.50$557.10($175.40)
1/8/0129AET$1,107.00$839.26($267.74)
1/8/0139COG$1,121.37$776.10($345.28)
1/8/0114QCOM$1,057.62$660.24($397.39)
1/8/018LH$1,077.50$649.68($427.82)
1/8/0118BA$1,071.50$600.48($471.02)
1/8/019DGX$1,030.44$552.78($477.66)
12/27/9918GM$1,318.62$765.90($552.73)
12/27/9920EK$1,301.75$649.80($651.95)
1/8/0120PVN$1,110.00$400.80($709.20)
1/8/0115NEWP$1,124.37$209.55($914.83)
 
Cash: 
Total: 
$10.80
$15,681.03
 

Key
• S&P 500 (DA) = dividend adjusted. Dividends have been added to the total return of the index.
• DJIA (DA) = dividend adjusted. Dividends have been added to the total return of the DJIA.

Note
Note: The Workshop Portfolio was launched on December 24, 1998, with $4,000 which was invested in the Foolish Four strategy. Approximately $15,000 was added on January 8, 2001, to support five additional mechanical strategies. At that time approximately $1000 was transfered out of the Foolish Four strategy to bring the Foolish Four into balance with the other strategies. (That's why the Foolish Four's overall return is not consistent with stock values.) Such rebalancing will take place each year among the strategies so that each will start out with approximately the same value at the begining of the year. No more cash additions are planned. The first four tables above show the overall performance of the portfolio. Below that we also track the performance of each component strategy. All transactions are announced publicly before being made, and returns are compared daily to the S&P 500 and the Dow. (Dividends are included in the yearly, historic and annualized returns.) Stocks are chosen using strategies developed by the Workshop community.