A stock's price follows its earnings, which in turn follow its sales. A company needs only to take care of its business for investors to profit in the long run.
With that in mind, examining companies whose revenues and profits are rising -- and which inspire analysts' confidence in continued future growth -- should give us a fertile field in which to discover solid candidates for long-term outperformance.
The roaring 20s
Below are a handful of companies that have enjoyed 20% or more annual growth in sales and earnings over the past three years, and for which analysts forecast total growth of 20% or more over the next two years. We'll then pair up those predictions with the community stock research at Motley Fool CAPS, to get an idea of which companies the 145,000-plus members think have the best chances of beating the market over the long haul.
|
Company
|
3-Year Past Revenue Annual Growth %
|
3-Year Past EPS Annual Growth%
|
Est. 2-Year Future EPS Growth
|
Est. 2-Year Future Revenue Growth
|
CAPS Rating
(out of 5)
|
|
China Automotive Systems
(Nasdaq: CAAS )
|
35%
|
48%
|
42%
|
29%
|
**
|
|
Gafisa
(NYSE: GFA )
|
69%
|
44%
|
64%
|
47%
|
**
|
|
Hi-Tech Pharmacal (Nasdaq: HITK )
|
30%
|
58%
|
35%
|
21%
|
***
|
|
Home Inns & Hotel Management
(Nasdaq: HMIN )
|
69%
|
50%
|
54%
|
28%
|
**
|
|
Research In Motion (Nasdaq: RIMM )
|
75%
|
70%
|
20%
|
28%
|
***
|
Source: CapitalIQ, a division of Standard & Poor's; Motley Fool CAPS.
Just because an analyst predicts that a company will feature fantastic growth opportunities doesn't mean those predictions will become reality. But their preferred picks do offer an excellent starting place for your own research into extreme buying opportunities, so let's see why the operations of some of these companies may or may not be held in high esteem by investors considering they appear to be sales and profits machines.
Tippling at the speakeasy
It's apparent Research In Motion is ceding no ground to Apple (Nasdaq: AAPL ) , as it just inked a deal with China Telecom, China's largest fixed-line telephone provider, to roll out RIMM's popular Blackberry sometime next year. Apple already signed an agreement with China Unicom to market its iPhone.
Sure, technical glitches like the service outages experienced the other day hamper its ascendancy, but RIM was able to boost market share in the third quarter even as Nokia (NYSE: NOK ) lost ground. It saw revenues rise 41% year over year, and 11% sequentially, as it shipped 10 million smartphones this quarter and added 15 million net new BlackBerry subscribers from last year.
Outage snafus aside, Research In Motion attracts a fan base every bit as rabid as a Steve Jobs worshipper. CAPS All-Star AaronRogers says RIM is hands down the best there is and its BlackBerry is an incomparable technological achievement.
Enough about [Research In Motion] and the doom and gloom. Pure and simple "Best of Breed." Proof is the fact that their 2 outages made the news. That is how perfect their system is when comparing. When a rare misfire happens it makes the news. The I-Phone is junk in operations comparison. More over, the I-Phone durability isn't comparable to the Black Berry. Touch screen no keyboard isn't preferred by consumers although it is more flashy. Corporations and business's dominate this market and face it [Research In Motion] owns this arena.
More than 5,200 CAPS members have rated the smartphone all-star and 84% believe it will outperform the market. Head over to the Research In Motion CAPS page and ring up your own opinion on whether it can beat Apple at its own game. Haters welcome.
No Great Depression
It pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made all from a stock's CAPS page. Why not head over to the completely free CAPS service and let us hear what you've got to say about these or any other stocks that you think we should fill up our dance card with?
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