12. Analysis Tool #9: Detect Red Flags
The best growth stock candidates grow sales and earnings at least 15 percent annually, and faster is better. Table 12-1 shows recent year-over-year revenue growth rate trends for a variety of stocks that meet that requirement. I didn’t list 2008 growth rates because in 2008, global economic problems overwhelmed individual company fundamentals.
I divided the stocks into four categories:
• Big bang stocks register high double-digit, even triple-digit, year-over-year revenue growth at the start. Of course, those rates are unsustainable, and growth slows quickly. ...