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Published byShon O’Neal’ Modified over 9 years ago
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Preparing SSG Using ToolKit 4.0 Features By Felicia Ware-Joyner
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Historical Growth Rate Change Double click on side 1 SSG –This brings up the Visual Analysis Graph Click the Historical Growth Rate Change Button –This brings up the Historical Growth Rate Change Graph
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Analysts’ EPS Growth Rate Page 134
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Preferred Procedure Page 134-138 Completely Optional (for Advanced Users Only)
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Section 2 Evaluating Management Page 139 - 141
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Evaluating Management Front page –Good track record of growth and earnings –If not do not go further Can Management Sustain the Growth? –If not, then stock is selling at a low price for good reason –It is not a high quality, great value stock The worse a company performs, the better a value it will appear to be.
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Profit Margins Review % Pre-tax Profit on Sales –Stable over 10 years? –Last 5 years? –Compare to Industry Averages Value Line Survey or www.marketguide.comwww.marketguide.com Serious Down Trends
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Pre-Tax Profit Margin Graph Page 140 - 141
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Section 3 Price-Earnings History Page 142 - 145
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Price-Earning History Eliminate Outliers –Average High and Low P/E High P/E will be radically inflated by one or more years of abnormally low earnings per share
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Upside Down Side Ratio 4D Back Side SSG
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Question What is our Target Upside/Downside Ratio?
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Forecast Low Price
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Average Low P/E
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Recent Severe Market Low
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Price Dividend Will Support
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UPS Historical Prices
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Relative Value The relationship between the Current P/E and the Average P/E Calculated –(Current P/E) divided by (Average P/E) Expressed as a percentage Desired Range –85% to 110%
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Check List Update Prices Data –Place your Name in the Prepare space –Note the last full year & month fiscal year ends
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Check List SSG Front Front Side SSG –Note Insider/Institution High insider is good Institutional Ownership over 50% is bad –Recent Quarter Figures –Visual Analysis
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Check List – Visual Analysis Historical Growth Est. Sales Growth Est. EPS Growth Preferred Procedure (optional)
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Check List – SSG Back 2 Evaluating Management –UP UP or UP Even or Up Down –Remove Outliers 3 Price-Earnings History –Remove Outliers –Note payment of dividends
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SSG Back 4 Evaluating Risk and Reward –Defaults of High & Low Price (comes from figures on front) –Select Potential Low Forecast Low – Growth Average Low – Cyclical companies Recent Sever Market Low – turnaround/volatile companies Price Dividend will support
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Check List – 4C and 4D 4C Zoning –Buy, Hold, Sell 4D Up-Side Down-Side Ratio –3:1 desired
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Check List – Relative Value 4E Price Target –Potential price appreciation over next 5 years Relative Value –Relationship between current P/E and the Average P/E –Guidelines 85% to 110%
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Check List – Projected Relative Value Based on estimated earnings for next 12 months Guidelines 80-100%
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Check List – 5-Year Potential Total Return –Price Appreciation & Dividend Yield –Want average gain to be at least 15% More mature companies will return less Small growth companies will return more
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