Fire Your Stock Analyst!: Analyzing Stocks on Your Own

Growth Stock Analysis Scorecard

I’ll use Impath, the cancer diagnostic service provider, to demonstrate how to fill out the growth stock scorecard.

Step 1. Analysts’ Ratings and Forecasts

Good growth candidates often have relatively weak, but not too weak sentiment scores, combined with strong earnings growth prospects.

The scorecard rewards firms with sentiment scores in the minus two to plus two range, and penalizes those with scores below minus two (too weak) and above plus eight (too strong). It penalizes companies with forecast annual earnings growth below 15 percent. Negative earnings forecast trends (forecast for the same period has declined from 90 days ago), or a history of negative earnings surprises (reported earnings below forecast) ...