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Carla Pasternak's Premiere Issue of High-Yield International Just
Released
Income expert Carla Pasternak's debut issue of High-Yield
International covers a Taiwanese manufacturer yielding 9.5%... a
rare Mexican monopoly yielding 13.4%... and other top-performing
investments yielding up to 19.0%.
Government's Biofuel Timetable Could Spell +15,900% Growth
+15,900% growth might seem far-fetched... but it's not. In fact, it
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The
Silver Lining to a Falling Dollar
Despite the U.S. national debt, there is a silver lining for income
investors. This massive spending, combined with movement out of U.S.
Treasuries, is going to take its toll on the dollar, and
international income investors could reap the rewards in the form of
higher dividends. |
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| Invest
in These Undiscovered Growth Stocks Before the Crowd |
Published: March 20, 2007
Every day the financial media
faithfully reports the latest opinions of Wall Street analysts.
Specifically, analysts issue written notes to their firms' clients
rating stocks as Buys, Holds, or Sells. These notes typically include a
detailed rationale for the rating, as well as estimates for the firm's
future revenues and earnings. And remember -- analysts typically send
their research to in-house clients first, before the media and investing
public hear their opinions.
Changes in an influential analyst's opinion or growth estimates on a
company can have a major impact on its shares. It's not unheard of for
even large-cap companies to rise or fall more than 10% in a single day
based solely on an analyst's change of opinion. And small-cap companies
can move a lot further than that on an upgrade or downgrade. Such
reactions are a testament to the fact that plenty of institutional
traders follow, or at least are influenced by, Wall Street research.
But what about companies that have no following on Wall Street, or that
are just covered by a single firm? As might be expected, these stocks
tend to fly under Wall Street's radar -- many traders are unaware of
their existence. Others may be unwilling to buy these stocks without any
sort of published earnings estimates.
Not all companies ignored by Wall Street analysts are tiny micro-caps.
In fact, my staff and I have uncovered dozens of firms with market
capitalizations well in excess of $2 billion that weren't even covered
by a single Wall Street research house.
Analysts are, however, constantly adding coverage of new stocks and new
industry groups. In many cases, there's a herd mentality at work --
several Wall Street firms will often initiate coverage of a particular
stock within a few months of one another.
The sudden notoriety caused when analysts initiate coverage can have a
tremendous impact on the shares. Suddenly, dozens of institutional
investors decide to take a look at the stock, and the firm's average
trading volume jumps higher. Then, whenever the company releases
important news or reports earnings, the analysts will be there with a
comment and/or updated earnings estimates. In other words, the limelight
is now permanently focused on the company. If the fundamental story is
solid, then investors will start to take notice and can quickly bid up
the stock.
But what makes Wall Street analysts first notice a stock to begin with?
The answer is simple: growth. For companies that post strong, consistent
growth in both sales and earnings, it's only a matter of time before
some research house or bulge bracket firm decides to initiate coverage.
After all, no research department wants to ignore the next hot growth
story, and no analyst wants to get a call from clients asking why they
haven't covered a fast-growing firm.
Those investors who jump into these future stars before analysts
initiate coverage stand to profit handsomely when the rest of Wall
Street piles in.
It's worth noting that we have ignored ADRs in our analysis below. ADRs
are just U.S.-traded versions of major foreign companies. Thus, while
the ADR may not have much domestic coverage, the stock is often closely
tracked in its home market. Therefore, it's likely already well-known to
most institutional players.
With these points in mind, my staff and I recently searched for
companies with little analyst coverage but strong growth prospects. In
the process, we looked for companies that met the following criteria:
-- Domestic firms
-- Research coverage by no more than one analyst
-- Three-year annualized revenue growth of +25% or higher
-- Three-year annualized earnings growth of +35% or higher
-- Market capitalization of greater than $150 million
After running these criteria through StreetAuthority's advanced
screening software, we came up with the following list of companies .
. .
Important Note: Throughout the
remainder of this article, editor Paul Tracy and our research staff
provide an in-depth look at 19 companies huge growth and little analyst
coverage. However, in order to view the remainder of this article,
you'll need to subscribe to our premium newsletter -- Market Advisor.
After you subscribe you'll receive immediate access to this full
article, as well as our monthly Market Advisor newsletter and a
host of additional premium content. Please visit one of the following
links to continue...
Good investing!
-- Paul Tracy
Editor
StreetAuthority
Market Advisor
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Paul Tracy
founded StreetAuthority and became Chief Investment Strategist in 2001. Prior to
that he spent several years as Managing Editor at a multi-million dollar
financial publishing firm with over 150,000 subscribers. In addition to
his role as managing editor and lead financial writer, he was also
responsible for equity research and managing a team of seasoned
professional financial writers, researchers and market commentators.
Paul's previous experience
includes a position at Robert W. Baird & Co.'s full-service
brokerage operations as well as economic research work on a Money and
Banking project funded by the National Bureau of Economic Research. He
has also spent time doing outside consulting and research for the
University of Virginia, has appeared as a guest expert on several
prominent financial radio shows, and has been a featured speaker at
various investment conferences across the U.S.
Paul graduated with a B.S.
in Finance and Management from the McIntire School of Commerce at the
University of Virginia.
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