Earnings: The Indispensable Element Of Great Stocks
Key Points To Remember
- Insist on the best earnings performance, not just
a promise of earnings. This way, you will pick stocks
with the best probability of making Yahoo-like gains.
- Look for companies reporting earnings growth of
at least 25% in the most recent quarter.
- Find companies with earnings that have accelerated
in the three or four most recent quarters.
- Identify stocks with annual earnings growth of at
least 25% over each of the previous three years.
- Focus on EPS Rating for a quick way to evaluate
a company's earnings. EPS Ratings of 85 or higher
are best.
- Don't overemphasize the price/earnings ratio as
a way to compare a company's stock relative to its
earnings.
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