Earnings, continued
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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Related Resources:
Click here to get the 7 Steps For Selecting Winning Stocks, according to the CAN SLIMTM Investment Research Tool.
Go to the Investor's Corner Archives to read IBD's "editor picks" of classic Investor's Corner columns.
Search our archive of Ask Bill O'Neil Q & A's organized by topic.
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