15%ers

[OldAIMGuy]

Hi Ergo, One of my basic search ideas had been to see growth in Revenues and in Book Value/share of roughly 15%. This means both should double about every five years. There's quite a few stocks out there that perform this regularly.

I want to see earnings also, but will forgive quarterly and yearly variances as long at top line and book value continue to grow. It's my opinion that earnings will follow if the other two are being done well.

I use Value Line as the basis of the histories on these two items.

I believe it was in Thomas Phelps' book "100 to 1 In The Stock Market" (1972) that the idea of consistent Book Value growth was finally drummed into my head.

If you have good long term growth then lots of other things will fall into line. Mr. Phelps warns not to just look at revenues or book value or income but a blend. We don't want to own companies run by EGOnomics.

BTW, on Page 39 of Value Line each week is their list of the 100 Highest Growth Stocks. These stocks have to have a 10 year history of superb growth of Book Value, Revenues, Earnings Cash Flow and Dividends that sums at least 13% per year. Not far from your mark! These same stocks are also expected to maintain at least that same growth combination for an additional 3-5 years.

For instance, this week on that list is are 15 stocks that are still expected to grow at 20% per year or better! Many more are expected to accomplish at least 15%. The "worst" on the list would be one that has 10 years at 13% and "only" expects 13% for each of the next 3-5 years.

I review this page in Value Line each week at the public library in town.

Hopt this helps,
Tom