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Preparing SSG Using ToolKit 4.0

Preparing SSG Using ToolKit 4.0. Features By Felicia Ware-Joyner. 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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Preparing SSG Using ToolKit 4.0

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  1. Preparing SSG Using ToolKit 4.0 Features By Felicia Ware-Joyner

  2. 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

  3. Analysts’ EPS Growth Rate Page 134

  4. Preferred Procedure Page 134-138 Completely Optional (for Advanced Users Only)

  5. Section 2 Evaluating Management Page 139 - 141

  6. 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.

  7. 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.com • Serious Down Trends

  8. Pre-Tax Profit Margin Graph Page 140 - 141

  9. Section 3 Price-Earnings History Page 142 - 145

  10. 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

  11. Upside Down Side Ratio 4D Back Side SSG

  12. Question • What is our Target Upside/Downside Ratio?

  13. Forecast Low Price

  14. Average Low P/E

  15. Recent Severe Market Low

  16. Price Dividend Will Support

  17. UPS Historical Prices

  18. 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%

  19. Check List • Update Prices • Data • Place your Name in the Prepare space • Note the last full year & month fiscal year ends

  20. 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

  21. Check List – Visual Analysis • Historical Growth • Est. Sales Growth • Est. EPS Growth • Preferred Procedure (optional)

  22. 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

  23. 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

  24. Check List – 4C and 4D • 4C Zoning • Buy, Hold, Sell • 4D Up-Side Down-Side Ratio • 3:1 desired

  25. 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%

  26. Check List – Projected Relative Value • Based on estimated earnings for next 12 months • Guidelines 80-100%

  27. 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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