Friday, July 15, 2011

Fastest Growing Earnings: Take Two Interactive

After reading an article from StreetAuthority about companies with the fastest growing earnings, it got me looking into the companies not already owned in Stone Fox Capital's Opportunistic models. The companies expecting huge earnings growth next year appear to be overlooked, but one should use the list as a starting point for research. The report is only as good as the underlying data. Not to mention that analyst estimates typically aren't up to date so reports can easily give false positives.

StreetAuthority makes a good point that these stocks expect to more than double earnings, yet they all trade for a PE of less than 13. Based on that combination, all of the stocks appear cheap. Now the question is whether the growth will continue on into calendar year 2013-- or if it's just a one year fluke. Another telling sign will be the direction of estimate changes for next year. It's typical for analysts to not update estimates leaving a wide variation, so if the numbers are dropping then watch out. 





Read the full article at Seeking Alpha. 




Disclosure: Long MTW, TEX, X, and MF in client and personal accounts. The information and data is believed to be accurate, but no guarantees or representations are made. The information contained herein is for informational purposes only and should not be relied upon as advice.

No comments: