Ascend Was Early Bird On Bandwidth.(THE SMART INVESTOR)(WINNING WAYS)

Byline: KEN HOOVER

Before the Internet caught on, Ascend Communications was making bandwidth products. Its products were widely used in the growing field of videoconferencing.

It came public May 16, 1994 (1), right in the middle of an ugly market correction. It quickly went into a correction itself.

It was worth keeping an eye on the Alameda, Calif., company during this time because of its outstanding growth. It was just starting to make money.

But for the two quarters prior to its breakout, earnings rose 1,200% and 1,500%. Sales were exploding, too. For the previous four quarters, they rose 174%, 141%, 117% and 119%.

When the stock did break out of its basing pattern to launch its run-up, its Earnings Per Share Rating was 91. Its Relative Strength Rating was 94. Its Accumulation/Distribution Rating was A. The 50-day ratio of up to down volume was 2.0.

The group's Relative Strength Rating was only 18. But that didn't matter, because four other stocks in the Computer-Local Networks group had RS ratings of 91 or above. It's enough that at least one other stock confirms the strength of the stock you're considering.