Growth Stocks

Growth stocks are companies that are experiencing accelerating earnings and sales growth on a quarter to quarter basis as well as over an extended period of time. Understand that a company can boost its earnings per share (EPS) results by cutting costs, and occasionally, by divesting money-losing operations. But such strategies can only go so far. Over prolonged periods of time, strong rates of EPS growth start with strong rates of sales growth, which is why its inclusion in the formula is necessary to spot growth stocks early on in the process.

In order to qualify as a Growth stock the company needs to have the following characteristics:

• The EPS (earnings per share) growth rate for the current quarter is greater than the trailing twelve month (TTM) EPS growth rate.
• The TTM sales per share growth rate (SPS) is greater than the thee-year cumulative average SPS growth rate.
• The TTM EPS growth rate is greater than the TTM SPS growth rate.
• The companies effective tax rate is greater than 24%.

H

High (Daily High)

Previous day's High of stock or index.

I

Income Statement

An income statement is a detailed summary of the income and expenses of a business over a specified period of time, showing the net profit or loss for that period.

Industry Group

Market Edge provides weekly industry group analysis for ninety-one major groups. The groups are categorized based on the collective strength of various Market Edge indicators. The purpose of this analysis is to identify those groups which have favorable market conditions and to further identify the stocks in the groups which are leading the industry. Studies have shown that when an Industry group moves, the entire group tends to move in concert, with certain stocks in the group outperforming the remaining stocks.

Insider Activity

Insider Activity shows how company insiders--directors, officers and key employees--feel about the prospects of a stock by looking at their stock purchases and sales over the last six months. Historically, stocks of companies with strong insider buying have tended to outperform stocks with neutral or negative insider activity.

Interest Expense

For industrial companies, this includes all interest expense on short/long-term debt, amortization of debt discount/premium and deferred expenses (e.g. financing costs). For real estate trusts and savings & loans, it includes interest paid on mortgage debt, convertible debentures, other debt obligations and short-term debt.

L

Long-Term Debt

Long-term debt refers to obligations for debts such as leases and bond repayments that come due in more than one year.

For banks, long-term debt refers to total borrowings for terms beyond one year, including notes payable, mortgages, debentures, term loans and capitalized lease obligations.

For industrial companies, it is debts/obligations due after one year, including bonds, notes payable, mortgages, lease obligations and industrial revenue bonds. Other Long Term Debt, when reported as a separate account, is excluded. This account generally includes pension and retirement benefits.

Low (Daily Low)

Previous day's Low.