“America’s Fastest Growing Companies” System
August 27th, 2007
“America’s Fastest Growing Companies” System
Another system for uncovering growth stocks is devised by John S. Herold, Inc.’s America’s Fastest Growing Companies, a monthly publication which concentrates on companies which are compounding their earning power and value at the highest rates. It is a good place to seek young but solid companies with excellent growth potential.
The publication’s selection of companies is based on growth in net income per common share, which is undoubtedly the most reliable yardstick of measuring a company’s real growth. Of 5,000 companies screened, only those companies recording the largest and most consistent year-to-year gains in earnings have been selected. An additional requirement is that every company, when first listed, show an uninterrupted gain in annual profits for three years immediately preceding.
Why a minimum of three years? Because any lesser period would be far too short to be indicative of any reliable growth trend. Stock buyers might be deceived by the temporary prosperity of a youthful growth company.