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jimthomas@yahoo.com  
#1 Posted : Monday, August 11, 2008 8:40:22 AM(UTC)
jimthomas@yahoo.com

Rank: Advanced Member

Posts: 105

http://www.stockcentral.com/tools/takestock/tabid/158/language/en-US/Default.aspx/ctl/return/mid/735/Default.aspx, says the following under the heading "Total Return at the Buy price" ...

If you buy Quality Systems, Incorporate at $46, you could realize an annual total return of 13.2% over the next five years.

However, considering the Potential High Price of $85.4, 13.2% is the return from price appreciation alone, ignoring the dividend yield (about 2%).  "Total Return at the Buy price", by definition, must be at least 14.9%.

-Jim Thomas

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DannyM  
#2 Posted : Monday, August 11, 2008 8:45:08 AM(UTC)
DannyM

Rank: Advanced Member

Posts: 262

I put an SSG on the qsii forum that shows a buy up to approx $39. If you bought today you would need an18% return just to get to $46

jimthomas@yahoo.com  
#3 Posted : Monday, August 11, 2008 8:56:39 AM(UTC)
jimthomas@yahoo.com

Rank: Advanced Member

Posts: 105

I assume your SSG uses different judgment than TakeStock (your high price is $76.3).

I'm pointing out an inconsistent formula in the online Take Stock.

-Jim Thomas

DannyM  
#4 Posted : Monday, August 11, 2008 10:20:44 AM(UTC)
DannyM

Rank: Advanced Member

Posts: 262

True Jim but it would seem my estimates are even more conservative than TS which is tradtionally ultra conservative. I was using 15% as estimated growth. I understand your note on needing the 14.9% return to double in five years. But I don't see how they would ever get a 3/1 U/D ratio with a buy up to $46. Mine was 3.3/1 at a price of $37.80

jimthomas@yahoo.com  
#5 Posted : Monday, August 11, 2008 10:58:25 AM(UTC)
jimthomas@yahoo.com

Rank: Advanced Member

Posts: 105

> But I don't see how they would ever get a 3/1 U/D ratio with a buy up to $46.

TakeStock is using a yield supported low price of $32.9, rather than its PExEPS forecast low price of $16.56.  That's how it gets a 25% risk ratio (aka 3-to-1 US/DS) with a buy price of $46.

Take a look at the "Risk" and "Price Analysis" sections at the "TSSW Back" link from TakeStock.

Note that the formula for Yield Supported Low Price in TakeStock is very different than that on the SSG (and the results of the two formulas are very different for QSII).  If you want to discuss the relative merits of the two formulas, I suggest that you start a different message thread.

-Jim Thomas

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