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One Quick Scan Turns
Up 3 +75% or More Winners for Market Advisor Subscribers
Published:
March 31, 2008
In
every issue of his
Market
Advisor newsletter, editor Paul Tracy runs a
comprehensive stock screen designed to pinpoint a handful of
promising stocks. These screens are a quick, but effective way
to hone in on a specific investment theme -- every
publicly-traded stock is subjected to a battery of tests, and
only those that pass each and every investment hurdle appear in
the "Inside the Numbers" segment of the newsletter.
The goal here is to cut down on wordy analysis and simply
present a clear-cut list of finalists that best fit that month's
topic. While the process itself remains constant, the criteria
change from month to month to make sure that readers are always
presented with a fresh batch of new ideas. In the January 2006
issue, for example, Paul focused on companies with accelerating
revenue and earnings growth: that is, firms that aren't just
growing, but growing at a growing rate.
There's only one thing Wall Street likes better than a rapidly
expanding company, and that's one whose rate of expansion is
itself climbing. For example, a firm that posted +30% earnings
growth last year might appear to be headed in the right
direction. But what if the company delivered growth of +40% in
2006? Clearly, then, it is still growing, but at a decelerating
pace.
By contrast, if the same company reported growth of just +20% in
2006, and +10% the year before, then its growth is increasing at
an increasing rate. Obviously, periods of accelerating growth
can't last indefinitely, but those who climb along for the ride
often enjoy outsized gains.
With that in mind, Paul went in search of companies that have
reported solid double-digit gains in revenues and profits for
three straight years and whose growth rates have marched
steadily higher during that time. And to eliminate any
contenders that are about to hit a wall, he also demanded
projected earnings growth of at least +15% annually over the
next five years.
Every domestic company was fed into this filter (which also
screened for certain market capitalization and valuation
requirements), and less than two dozen made the cut. Of course,
not every single one of those has been a homerun, but the screen
did produce a number of market-beaters, including companies like
XTO Energy (NYSE: XTO, $60.71), China Petroleum & Chemical
(NYSE: SNP, $87.18), and Rio Tinto (NYSE: RTP, $407.52) --
which have since delivered hefty gains of +75%, +84%, and +136%,
respectively.
In a recent issue, Paul goes "Inside the Numbers" in search of
companies that are perfect "short-squeeze" candidates.
These fundamentally sound firms have a large percentage of their
shares sold short, and it won't take much in the way of good
news to trigger a sharp rally -- which could quickly unleash a
tsunami-like wave of short-covering, which in turn fuels even
more buying. One of this month's finalists has attracted short
sellers because of increased competition, but the explosive firm
has been compared to a young Google (Nasdaq: GOOG) and is
forecast to enjoy heated earnings growth of +45% annually over
the next five years.
To read the complete profile of this exciting company, and to
learn the names of each of Paul's top short squeeze candidates,
we invite you to become a
Market
Advisor subscriber.
Click
here to learn more about our trial offer.
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Nathan Slaughter
StreetAuthority Staff Writer
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Income Security
of the Month
Our "Income Security of the Month" for August 2008 invests in a
fast-growing overseas market that doesn't get much exposure in the
mainstream financial press. And although it typically makes enormous
annual dividend payments -- it has paid an average dividend of
25.5% per year over the past five years -- this fund is perhaps
most appealing for its total return potential. Specifically, the
fund has delivered total returns of +178.9% since 2003,
and it ranks in the top 10% of its category over the past decade.
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Top
10 Stocks for 2008!
Since we began publishing this report back in 2003, the picks we've
featured have consistently beaten the broader market -- delivering average
gains of +21.3% per year and outperforming the S&P by a nearly
2-to-1 margin. Act now to reserve your copy of our newest report -- Top
Ten Stocks for 2008. |
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