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When it comes to investing, stock returns tend to be correlated to the fastest growing companies.  With this in mind, we have posted the current list of the fastest growing companies by revenue.  We try to limit the list to U.S. based companies and we screen for companies that in our view have reasonably good fundamentals.  Our stock screen currently looks like this:

1. 1. Market Value > $1 billion
   2. Annual Sales > $200 million
   3. Sales Growth last year > +50%
   4. Current Ratio > 1.2
   5. Number of Funds who own the stock > 200
   6. % increase in Fund ownership last quarter> 4%
   7. % off high < 15%
   8. 10 day moving average > 21 day moving average > 50 day moving average

That screen, in plain English means this:

1. 1. I am looking for companies with a market value over $1 billion (because I don’t want very small companies)
   2. I want their sales to be over $200 million annually (sales this high helps me weed out biotech companies that have no sales) and
   3. I would like the sales to be up 50% or better over the last year (this helps us skip over companies who are growing by buying other companies – I prefer organic growth)
   4. I want a financially strong company with a current ratio of 1.2. That means that the company has 1.2 times as much in current assets compared to current liabilities.  Look at current assets as what you have in your checking account and inventory right now $1,200 divided by what you owe on your bills, this month $1,000. 
   5. I am looking for companies where 200 or more mutual funds or professional investors own the stock
   6. The number funds buying has increased by 4% or more in the last quarter
   7. The stock needs to be within 15% of its all-time high price (remember, we are looking for stocks that are growing and being accumulated by the professionals)

When we run the screen with these parameters, we get this list: (click the list to see a high resolution picture)

Source: MarketSmith

This material is of a general nature and intended for educational purposes only.  This information should not be construed as investment advice.

You may have heard of some of these companies, but many people have not because they tend to be new companies with new products or services.  This list is not a “buy list” and is not meant as recommendations by any means.  The list is simply a starting point for us to learn more about these companies to find out if they are possible investment candidates.  The next step in our process is for us to complete a fundamental analysis where we review the balance sheet, income statement and the statement of cash flows. 

Investing today requires a customized financial plan integrated with a well thought out investment approach. If you have questions about how to invest or which investments may make sense for you, schedule an appointment by clicking this link or contact us today at david.cross@us-am.com or 678-894-0697.