A FEW GOOD STOCKS
VDSI
Very strong growing company with both top- and bottom-line growth at about 40% annually. High return on equity (over 40%). Strong and scalable business model, dominate market share, very strong management with consistent and proven track records. While relatively weak in USA, it provides an opportunity to participate the Continental market. A bit on the expensive side, trading currently at 45X of its 05EPS, 32X of 06EPS and about 24X of its 07EPS. While not over-valued in relation to its growth rate, it had better deliver its quarters. The stock has been on a slow downtrend as multiple contracting after Q4/05. Who knows, an 8.0 would be a bargain pick.
RAVN
Man, what a beautiful chart! Straight up. Wish I have picked it earlier. Again, strong topline and bottomline growth (over 20%), strong track record. Still very little coverage. Valuation is reasonable, perhaps a bit on the expensive side. (29X, 24X, 21X). It also has a rather generous yield for a growing stock. I believe this one probably is purchasable here, although I would rather wait for a better entry.
WEX / SMIT
Two micro caps. Both have very reasonable valuation, which is a given as practically no one covers these micro caps. However, growth appears to be rather weak (single digit). WEX is interesting story. However, more than half of its sales are to one single company, Select Comfort (which happens to be one of my recent picks).
Very strong growing company with both top- and bottom-line growth at about 40% annually. High return on equity (over 40%). Strong and scalable business model, dominate market share, very strong management with consistent and proven track records. While relatively weak in USA, it provides an opportunity to participate the Continental market. A bit on the expensive side, trading currently at 45X of its 05EPS, 32X of 06EPS and about 24X of its 07EPS. While not over-valued in relation to its growth rate, it had better deliver its quarters. The stock has been on a slow downtrend as multiple contracting after Q4/05. Who knows, an 8.0 would be a bargain pick.
RAVN
Man, what a beautiful chart! Straight up. Wish I have picked it earlier. Again, strong topline and bottomline growth (over 20%), strong track record. Still very little coverage. Valuation is reasonable, perhaps a bit on the expensive side. (29X, 24X, 21X). It also has a rather generous yield for a growing stock. I believe this one probably is purchasable here, although I would rather wait for a better entry.
WEX / SMIT
Two micro caps. Both have very reasonable valuation, which is a given as practically no one covers these micro caps. However, growth appears to be rather weak (single digit). WEX is interesting story. However, more than half of its sales are to one single company, Select Comfort (which happens to be one of my recent picks).
posted by ZIGZAG at 3/27/2006 10:36:00 PM
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