This is a growth screen based on the approach of the late Phil Fisher, one of the great investors of all time and the author of the classic book Common Stocks and Uncommon Profits. Fisher started his money management firm, Fisher & Co., in 1931 and over the next seven decades made tremendous amounts of money for his clients.
Philip Fisher had a famous 15 point checklist for investing in stocks. Even though it includes numerous qualitative factors, it's possible to glean some key quantitative criteria too:
Consistently strong profitability;
Consistent sales growth;
Growth exceeding industry norms;
Little or no dividend payout; and
Reasonable price compared to future growth prospects
You can read more about Philip Fisher's approach here. more »
Sales growth shows the increase in sales over a specific period of time. The CAGR formula is the following: (current year's value / value 5 years ago) ^ (1/5) - 1
NOTE: If the starting year's figure is zero, the CAGR is not defined.
Stockopedia explains Sales 5y CAGR %...
Sales growth is important because, as an investor, you want to know that the demand for a company's products or services will be increasing in the future.
It is important to distinguish however between organic sales growth and acquisitive growth. Growth rates differ by industry and company size. Sales growth of 5-10% is usually considered good for large-cap companies, while for mid-cap and small-cap companies, sales growth of over 10% is more achievable.
This shows how many years consecutively the company has managed to grow its topline revenues (sales). i.e. Sales Streak = 3 shows that the company has grown its sales for the last 3 consecutive fiscal years.
Stockopedia explains Sales Gwth Streak...
Sales Growth is a very positive sign for growth investors and is a criteria in the Phillip Fisher screen that we have modelled.
Also known as Return on Sales, this value is the Net Income divided by Sales for the same period and expressed as a percentage. This is one of the best indicators of the company's efficiency because net profit takes into consideration all expenses of the company. Investors want the net profit margin to be as high as possible.
Stockopedia explains Net Mgn %...
This is one of the best indicators of the company's efficiency because net profit takes into consideration all expenses of the company. Investors want the net profit margin to be as high as possible. Rising margins are seen as a positive signal although high margins do tend to attract the interests of competitors.
The PEG is a valuation metric used to measure the trade-off between a stock's price, its earning, and the expected growth of the company. It was popularised by Peter Lynch and Jim Slater. In general, the lower the PEG, the better the value, because the investor would be paying less for each unit of earnings growth.
A PEG ratio of 1 is supposed to indicate that the stock is fairly priced. A ratio between .5 and less than 1 is considered good, meaning the stock may be undervalued given its growth profile. A ratio less than .5 is considered to be excellent.