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THE VTHE VALUE LINE
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?ªSmall and Mid-Cap Edition ?ªSmall and Mid-Cap Edition?ªSmall and Mid-Cap Edition
HOW TO INVEST
The Guide to Using
THE VALUE LINE
?ªSmall and Mid-Cap Edition
. 2002, Value Line Publishing, Inc. All rights reserved. Factual material is obtained from sources believed to be reliable and is provided without warranties of any kind.
THE PUBLISHER IS NOT RESPONSIBLE FOR ANY ERRORS OR OMISSIONS HEREIN. This publication is strictly for subscriber's own, non-commercial, internal use. No part of it may be reproduced, stored or transmitted in any printed, electronic or other form, or used for generating or marketing any printed or electronic
publication, service or product.
THE VALUE LINE INVESTMENT SURVEY
?ªSMALL AND MID-CAP EDITION
In response to requests from subscribers, Value Line has more than doubled the universe of 1700 companies it follows in The Value Line Investment Survey by introducing The Value Line Investment Survey?ªSmall and Mid-Cap Edition, which covers 1800 additional stocks. The Small and Mid-Cap Edition provides more avenues in your quest for superior returns on capital. It is backed by a disciplined, objective, quantitative approach similar to the analytical methodologies that have proven themselves for decades in The Value Line Investment Survey. There are, however, a few differences. There are no estimates of earnings and dividends. And a more detailed description of the companies replaces the analysts?? commentaries. These differences between the coverage of the 1700 companies in The Value Line Investment Survey and the 1800 additional companies in the Small and Mid-Cap Edition constitute a tradeoff that enables us to provide coverage of many more companies at little incremental cost to you, our subscribers. We are proud to continue to assist you in making your investment decisions.
THE SMALL AND MID-CAP EDITION??S
The Value Line Investment Survey?ªSmall and Mid- Cap Edition has a number of features that distinguish it from other investment advisory services.
First?ªBroader Coverage?ªReports cover approximately 1800 stocks. Many small- and medium-cap equities are included in the Small and Mid-Cap Edition. These reports are organized by industry, corresponding to most of the industry groups in The Value Line Investment Survey.
Second?ªPerformance,. Technical and Safety.
Ranks for all 1800 Stocks?ªThe Performance. Rank incorporates most of the elements of the Value Line Timeliness. Rank and is designed to forecast relative
performance during the next six to 12 months. The Technical Rank, which is also used in The Value Line Investment Survey, projects stock price performance relative to the overall market during the next three to six months. It is also a component of the Performance. Rank?ªalbeit a minor factor. The Safety. Rank measures the total risk of a stock using the Price Stability index for that stock and the company??s Financial Strength rating.
Third?ªConsensus Earnings Estimates?ªConsensus mean quarterly earnings estimates (going out three quarters), mean annual earnings estimates for the next two years, and consensus 5-year earnings growth estimates are provided for many companies, as available. These consensus estimates are based on a diverse group of Wall Street sources and are not made by Value Line analysts.
Fourth?ªAn Expanded Business Section?ªThis
commentary explains what the company is all about. It focuses on the company??s business lines and strategy.
Fifth?ªA New Assets and Liabilities Section?ªA complete balance sheet replaces the Current Position and Capital Structure information in the Value Line Investment Survey of 1700 stocks in order to give you a more comprehensive numerical picture.
Sixth?ªNew Total Return Section?ªProvides the stock??s total return?ªdividends plus appreciation?ªover the past three months through the last five years.
Seventh?ªImportant Investment Screens?ªTheSummary & Indexshows weekly alphabetical listings of all 1800 stocks with important statistical information about each at a glance. It also provides five weekly screens of stocks grouped according to various criteria, such as stocks ranked 1 for Performance,. another table with rank 2 stocks, stocks to avoid (ranked 5), the best performing stocks
during the last 13 weeks and the worst performing stocks
during the last 13 weeks.
Eighth?ªContinual, Current Follow-up?ªImportant company developments appear in Supplementary Reports in Ratings & Reports. Rank changes are listed in each week??s Summary & Index.
ITS TWO MAIN CRITERIA?ªPERFOR
MANCE. AND SAFETY.
The Value Line Performance.Rank incorporates most of the elements of the Value Line Timeliness. Ranking System. The basic components of the Ranking System are earnings and prices, i.e., objective data. A computer program combines these elements into a forecast of price behavior of each stock for the next six to 12 months relative to the universe of 1800 stocks in the Small and Mid-Cap Edition. The results are ranked as follows:
Rank 1 (Highest): Expect this stock to be one of the best relative price performers during the next six to 12 months (100 stocks).
Rank 2 (Above Average): Expect better-than-average price performance (300 stocks).
Rank 3 (Average): Expect price performance in line with the market (1,000 stocks).
Rank 4 (Below Average): Expect below-average price performance (300 stocks).
Rank 5 (Lowest): Expect the poorest relative price performance (100 stocks).
* Rank suspended.
-Rank omitted due to short history.
Changes in the Performance. ranks can be caused by:
1. New earnings reports.
2. Changes in the price movement of the stock relative to the market.
3. Shifts in the relative positions of the 1800 stocks.
The Value Line Safety. Rank measures the total risk of a stock. It is derived from a combination of the stock??s Index of Price Stability and from the Company??s Financial Strength rating. Safety. ranks are also given on a scale from 1 (safest) to 5 (riskiest) as follows:
Rank 1 (Highest): This stock is probably one of the least risky stock market investments.
Rank 2 (Above Average): This stock is less risky than most.
Rank 3 (Average): This stock is of average risk.
Rank 4 (Below Average): This stock is riskier than most.
Rank 5 (Lowest): This stock is probably one of the riskiest.
GETTING THE MOST FROM THE
SMALL AND MID-CAP EDITION PAGE
22 21 19 17 16 201518
WORKINGCAP??L($MILL)15.718.527.850.345.447.363.765.1--P/Eratios. LONG-TERMDEBT($MILL)20.6126.96.36.1999.410.31.876.5-- SHR.EQUITY($MILL)33.241.051.768.974.997.3123.5162.1-- RETURNONTOTALCAP??L3.6%13.2%15.2%17.3%15.0%18.8%19.3%14.2%-- RETURNONSHR.EQUITY4.3%15.6%18.1%20.4%19.9%20.2%19.5%18.4%-- RETAINEDTOCOMEQ2.8%14.1%16.9%19.4%19.0%19.5%18.8%17.5%-- ALLDIV??DSTONETPROF34%10%7%5%5%3%4%5%--