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Gold/Mining/Energy : Canadian Small Cap Stocks
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To: Gordo who wrote (152)6/26/1998 5:51:00 PM
From: Ally  Read Replies (1) of 512
 
Gordo,

>>I also agree that I prefer growth over a pure P/E measure. One of the key indicators that I look for in this area is the PEG ratio - P/E divided by earnings growth.<<

Agreed. The financial analysis model I use also has this ratio, although expressed inversely from PEG. That is, eps/pe. A value greater than 1 can be considered a reasonable buy.

>>have had good luck investing in companies with a PEG ratio of 0.5 or less. This is an investment philosophy espoused by many growth style investors over time including Peter Lynch.<<

Gordo, 0.5 is a fantastic ratio! How do you find candidates selling at such a bargain? I'm still looking, still lookin' ..:-)

>>One final thing that I always do as well on any company is margin analysis, particularly gross margins (revenue less COGS). I prefer companies with gross margins in excess of 60%<<

Wow.. 60% and up gross margin!! Companies with such high margins tend to be in software, biotech, drugs, and DELL (jit technology).

Thanks for the names.. I'll check them out.
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