In my previous post I talked about two books on growth investing for those interested in becoming growth investor. While those two books provide you with template for trading growth stocks, there are many more books on growth investing. If you are serious about making money, you can go through these books as they offer other ways of trading growth stocks.
Frank Cappiello's New Guide to Finding the Next Superstock
Frank Cappiello's New Guide to Finding the Next Superstock
There are stocks and then there are super stocks, there is a stock market and there is a super stock market. And they barely know each other. That is the central premise of Frank Cappiello's book on growth investing. Super stock according to him is a stock of small growing company which will beat the market significantly. His book was published before O'Neil book. It also gives a approach to trading growth stocks.
All the things he finds about growth stock are more or less same as what the CANSLIM approach emphasizes in stock selection. He found 9 characteristics common to super stocks.
- Small to medium size
- Rising unit sales volume
- Rising pretax profit margins
- Above average and improving return of shareholders' equity
- Strong earnings per share growth relative to other stocks
- A low payout ratio with rising dividends
- Low debt ratio
- Low institutional holdings
- Increasing price earnings multiple
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