This forum is based on Dan Ross' Growth Stocks of 1997 thread.
We learned something with that so let's try it again. The 1997 results
will be posted shortly on that thread:
Subject 10787
This forum is being established to find the stars of 1998. Listed
below are the criteria for a stock to be mentioned in the forum.
Please follow the requirements below to ensure that all SI members can
get a grasp of the stock.
Requirements
1.) Give the story of the stock.
ú You cannot simply state the symbol.
ú State why you feel the company is poised for growth. Convince us!
2.) We are looking for growth stories. Revenues growing at least
40% annually, but 75% and above will really be given priority.
3.) Fewer shares outstanding will be given some priority.
4.) Over $2.
5.) No gold stocks, oil stocks, or crazy schemes.
6.) This is a technology basket. Biotech is interesting but set
up a different forum, those companies are valued differently and we
can only keep track of so much.
7.) Unlike last year we will accept stocks which are poised for
profitability and therefore have high or no P/E's. But priority will
be given to low P/E's, patterns of strong sales growth, and an
existing customer base. No 'longshots'. These companies should be
somewhat proven with a track record of good management.
8.) Companies which are well financed with lots of cash in the
bank will be given priority.
9.) Companies with market caps of less than $500 million will be
given priority. Under $150 million: very high priority. "Room for
high growth" and "undiscovered gems" are the watchwords here. The
AOL's, the Yahoo's, etc. have already been discovered by everyone with
a mouse and a calculator. Try to pretend you are Peter Lynch, but a
Peter Lynch who is less averse to investing in growing technology
companies.
10.) Companies which make gizmos and hardware in highly competitive
sectors will be given lower priority. Their margins usually get
squeezed. Microsoft doesn't make hard drives. Cisco is another
story, but you'll agree that is a totally different animal.
The requirements here are more open than last year--I used the word
'priority' rather than a priori rejecting anything--to give
participants a chance to use their creativity and convince us. So
lobby away. If the thread suspects you are a shill or a hypester you
will be hounded off of here so please do not dump stock
symbols and big promises on here without being prepared to discuss
financials and track records! Keep in mind that if you recommend a
company with a Price-to-Sales ratio of 20 you had better be very
convincing!
I will create two baskets from all of the suggestions. Basket 1, of 5
stocks, will be the 'high growers' with the most potential. Basket 2,
5 stocks, will be of 'value growers', companies which are like the
high growers but for one reason or another missed a quarter or had
severe declines in stock price, and are therefore giving us the best
of both worlds by being high growers and value priced. Basket 2
should have low P/E or at least very low projected 1998-9 P/E's.
By the way, I don't use the Motley Fool's "PEG" concept. It's fun to
talk P/E and growth prospects, but to project growth rates 3-4 years
out is an art, not a science, as Ben Graham showed us long ago. If
you believe such projections to be scientific, as I believe the PEG
concept encourages us to do, you will consistently overpay for stocks.
(By the way, for this reason I bet basket 2 does better than basket
1.)
OK gang, give me your darlings of 1998! And give us the whole pitch,
not just a symbol! |
