HIPS Rating System & Sector Watch Updates ....Updated 1/25/2001 - 2/16/2001

The HIPS Ratings System ....Understanding The H.I.P.S. Research Reports

The following ratings form the basis for the Hannaian Intellectual Property Stock (HIPS) Research System. It is important to understand these ratings thoroughly, as they were developed to directly support the basic HIPS philosophy .....Aggressive Investing in Small & Emerging Growth Companies .....Rich in Intellectual Properties ....Buying on Fundamentals & Selling on Behavior. They have been developed by various means and implemented experientially. Unlike many traditional ratings the HIPS ratings are "Comparative Ratings" based on a common sense approach and evaluation of the particular elements of the company and its stock. They are designed to give an interpretive evaluation and meaningful analysis rather than a quantified reporting of the raw numbers or formulas. For example, rather than the traditional reporting of Revenue figures which gives the actual amount of Revenues a company generated, the HIPS Revenue Generation Rating gives an interpretive evaluation as to what the revenue figures really mean when you evaluate them on a comparative scale from 1 to 10. This type of interpretive analysis gives the reviewer and researcher a meaningful evaluation of the figures and their relationship to the particular company. In addition, many of the HIPS ratings are also compilations and formulas totally unique to the HIPS system and cannot be extrapolated into other stock research reporting systems since they are designed to report on particular HIPS related issues.
Glossary
Ratings 0-10.....10 represents the greatest potential
Company Profile & Fundamentals = Clicking on the name of the company gives a review of the fundamentals & charting analysis
I.P. Value = Rating of the value of the company's Intellectual Property holdings.
S.T. = (Short Term Potential) Potential for minimum 25% increase in price within 6 months (factors in Technical & Fundamental analysis)
L.T. = (Long Term Potential) Potential for minimum 25% increase in price between 6 months and 3 years (factors in Technical & Fundamental analysis)
F. Rate = (Fundamentals Rating) Rating based on the current strength of traditional fundamentals of the company. The higher the rating the greater the strength of the fudamentals.
R.G. Rate = (Revenue Generation Rating) Rating based on an overall evaluation of the company's ability to generate revenue from sales & other company operational activity like investments owned by the company, etc. The higher the rating the greater the revenue generated.
E.G. Rate = (Earnings/Profits Generation Rating) Rating based on an overall evaluation of the company's generation of Earnings/Profits. The higher the rating the greater the earnings generated.
E/R Ratio = (Earnings to Revenue Rate Ratio) A comparison of the E and R ratings to give a E/R ratio provides some idea of the financial proficiency of the company. This ratio is similar to the traditional EPS ratio but more important for the HIPS stock profile because many of the small emerging companies in HIPS do not have traditional EPS values available. In addition the E and R ratings are based on an overall evaluation of earnings and revenues as they relate to the company's financial operations rather than to its outstanding shares. It is not a calculation based soley on the figures but on subjective ratings which includes the figures and more. The higher the rating the greater the financial profiency.
D. Rate = (Debt Rating) Rating based on the amount of debt the company is carrying. The higher the rating the less debt carried.
D.P. Rate = (Dilution Potential) The level of convertible issues which may dilute the market in the stock, like outstanding Stock Options, Convertible Bonds, and Warrants. Unlike the traditional Diluted EPS this rating takes into account Restricted Stock Lock Up Periods, and the probability of the company issuing additional shares into the market for any reason. The higher the rating the lesser the potential for dilution.
EFL. Rate = (Effective Float Rating) A rating which evaluates the effectiveness of the stock Float in the market in relation to other company fundamental factors. It provides some evaluation of the ease with which the stock price can rise or fall based on the relative and effective size of its Float. Generally the higher this rating figure the lower the Relative/Effective Float. The rating identifies the Float in terms of its relative size compared to the size of the company, the authorized shares, the outstanding shares, and market capitalization. It takes into account how the physical size of the Float relates and compares to these aspects. It attempts to give an overall evaluation of the effectiveness of the Float as a predictor of potential price movement based on the purchase or sale of a block of 10,000 shares.
T. Rate = (Technical Rating) Rating based on a current technical analysis for potential stock price appreciation short term.
V. Rate = (Value Rating) Rating based on the current price of the stock compared to its earnings,book, &/or market value. The higher the rating the more undervalued is the current stock price.
M.N. Rate = (Market Notice Rating) Rating based on the level of notice or interest the traditional Wall Street investment, press and analyst communities have taken in the stock within the past twelve (12) months. It includes the element of insitutional interest which takes notice of the level of investment by institutional or major investors. The utilization and effect of a low or high M.N. rating depends on the particular situation and motive of the investor.
C. Rate = (Competitive Rating) Rating based on strength of the Company's competitors. The higher the number the stronger or more competitive the Company is with its competition.
D.S. Rate = (Downside Risk) Rating based on potential for loss of 50% of investment within twelve (12) months.
P.T.P. Rate = (Prior Trading Performance) Rating based on the past trading performance prior to the date Hannaian coverage started. It represents past trading performance if the stock was closely followed and traded to maximize profits between the lowest and highest prices during the previous twelve months. The rating represents an overall assessment of the opportunity to have accumulated profits trading in this stock during the time period.
C.T.P. Rate = (Covered Trading Performance) Rating based on the trading performance between the time Hannaian coverage started through the date of the last review. It represents past performance during this period if the stock was closely followed and traded to maximize profits between the lowest and highest prices during this period. The rating represents an overall assessment of the opportunity to have accumulated profits trading in this stock during the time period.
S. Rate = (The Sector Rating) (S.R.) rates the hotness of a sector. Always follow the hot sectors. As sectors become hot the money in the market shifts to the hottest sector. The HIPS report is now categorized by sectors to facilitate this process. However the S.R. provides a more definitive rating of the particular sector. e.g. With the Telecommunications sector listings there may be stocks within a partiicular niche within that general sector which may be in a hotter part of the already hot sector. Many times companies will shift focus or develop a new physical product or Intellectual property and the stock will therefore make a shift to a hotter sector. This is particularly so with the modern trend of acquisitions, mergers and collaborations, a good example is the major shift of brick and mortar companies becoming primarily Internet based companies in whole or in part. Within the HIPS Research system these shifts in sectors for previously covered stocks will be alerted by the S.R. cell being highlighted in the color purple.
R. Rate = (Rolling Rate) The history and potential for the stock price to roll regularly up and down. representing volitivity in a regualr fashion and allowing increased potential for profits from trading the issue. This factor can change or occur for short periods of time when traders utilize certain circumstances affecting an issue and use and/or manipulate it for trading profit purposes. Watch for a pink highlight of the R.R. cell of a stock to alert you to a stock not historically a roller going through one of these periods. Stocks can roll on the way up, on the way down, or staying horizontally, either way they represent opportunities for significant trading profits.
I.O. Rate = (Institutional Ownership Rating) Rating based on the amount & quality of institutional investors who have invested in the Company. The higher the rating the greater the amount of institutional ownership.
M.O. Rate = (Management Ownership Rate) A rating on the percentage of ownership of issued shares which is held by Management of the Company. The higher the rating the greater the percentage ownership.
B.R. = The Buy Rating represents the overall average of all rating factors except M.N., P.T.P, C.P.T., and D.S.. The B.R. should be correlated with M.N. and D.S. and your personal investment circumstances and portfolio when using it as an ultimate buy indicator.
Hannaian Comments & Opinions = Additional comments about the stock.
Other Research 1 = Clicking on the link gives an outside opinion & analysis of the stock.
Other Research 2 = Clicking on the link gives a different outside opinion & analysis of the stock
Review Updates = Dates of first & last Hannaian review of this stock.
Intermediate updates not included. Ratings presented represent the last update.

Click here to  Download The HIPS Stock Research Log ...used to facilitate the researching of stocks

Color Codes & Alerts = Certain colors are used in identifying important alerts and characteristics of a stock. Red.....Newly identified issues being covered for the first time and not yet fully researched are highlighted in red. This is important to be aware of because investment in these stocks are more risky until they have been fully researched. They have been identified to allow subscribers to see as early as possible some of the issues being looked into. Yellow.......Stocks of a more mature nature which may be marginable, optionable, capable of large institutional trading, listing on a major exchange, and greater Market Notice are highlighted in yellow. This is important in analyzing the issue, particularly when a stock has broken out of a less mature category into a more mature category. When a stock first makes this crossover it is important to start looking at it differently as it usually means the stock has significantly improved its ability to grow. Green .......Newly updated reviews of previously covered issues will have their Review Update cells outlined in Green. This color coding will usually be present for approximately one month. This facilitates identification of those stocks that have been recently reviewed. Blue........When the Value Rate (V. Rate) cell is highlighted in blue it denotes an issue which has been beaten down in price at the time of the latest review. Such issues may represent an especially good value if all else remains the same. Orange.........Headings and the center column (V. Rate) are outlined in orange to allow ease of following the chart. Pink .... A pink highlight of the R.R. cell of a stock is an a alert that a stock not historically a roller is going through a rolling period. Purple ... Shifts in sectors for previously covered stocks will be alerted by the S.R. cell being highlighted in the color purple. Brown ... A significant change in Market Notice Rate (M.N.) on a previously covered issue will be highlighted in brown in the M.N. cell.

Nasdaq Stock Symbol Explanations

A unique four- or five-letter symbol is assigned to a Nasdaq security. If a fifth letter appears, it identifies the issue as other than a single issue of common stock or capital stock. A list of fifth-letter identifiers and a description of what each represents follows:

A - Class A
B - Class B
C - Issuer qualifications exceptions*
D - New
E - Delinquent in required filings with the SEC
F - Foreign
G - First convertible bond
H - Second convertible bond, same company
I - Third convertible bond, same company
J - Voting
K - Nonvoting
L - Miscellaneous situations, such as depositary receipts, stubs, additional warrants, and units
M - Fourth preferred, same company
N - Third preferred, same company
O - Second preferred, same company
P - First preferred, same company
Q - Bankruptcy Proceedings
R - Rights
S - Shares of beneficial interest
T - With warrants or with rights
U - Units
V - When-issued and when distributed
W - Warrants
Y - ADR (American Depositary Receipt)
Z - Miscellaneous situations such as depositary receipts, stubs, additional warrants, and units.
* The letter "C" as a fifth character in a security symbol, indicates that the issuer has been granted a continuance in Nasdaq under and exception to the qualification standards for a limited period.
Syndicate Bid
A Syndicate Bid can be entered in the Nasdaq System to stabilize the price of a Nasdaq security prior to the effective date of a registered secondary offering. This activity is permissible under SEC Rule 10b-7.
Surprise (Earnings Surprise)
A company earnings report that differs(either positively or negatively) from what analysts were expecting (consensus forecast). This often causes movement in the stock's price.
See Consensus Rating. Special symbols are used for negative actual or expected earnings as follows:

N+ : Negative actual earnings with positive surprise
N- : Negative actual earnings with negative surprise
-+ : Negative consensus earnings with positive actual earnings
-0 : Negative consensus earnings with zero actual earnings
-VL: Very large negative percent surprise
+VL: Very large positive percent surprise
NA : Not available (data necessary for calculation are not available)

Remember that these ratings and the comments & opinions may not be accurate due to current or unexpected changes in the market or the company's status.