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Byline: David Saito-Chung
IBD built its cash-flow list first by culling stocks with an Earnings Per Share Rating of 80 or higher and a price of at least $12 ashare. These companies also had to have an earnings growth estimate of at least 10% in the current fiscal year, based on First Call's survey of analysts.
From these 680 companies, we demanded that cash flow per share from operations be at least 20% higher than earnings per share in the latest fiscal year. This is a trait shared by the greatest stocks over the past 40 years. Cash flow also had to have risen from year-ago levels for three straight years.
The final list came to 219 firms. They're ranked first by Earnings Per ShareRating, then by annual cash flow-per-share growth over the past three years. The average company had an EPS of 92, a three-year cash flow-per-share growth rate of 27% and $2.47 in cash flow per share from operations in the latest year.
Professional Detailing, which helps large drug companies market their products to doctors, made the top 10 by posting a 99 EPS and cash flow growth of 115% over the past three years.
Being in a hot industry has surely helped the Upper Saddle River, N.J.-basedfirm achieve fast growth. The market ...