Published:
July 20, 2007
The
correct answer is
(B.) Ceradyne (CRDN)
At the end of the day, all
companies have a single goal in mind
-- to make a profit. And because
profits are a key driver of stock
prices, the earnings per share (EPS)
line on the income statement is
often the first place an investor
looks when evaluating a firm.
However, it's easy to forget where
those earnings originate from.
Before a company can turn a profit,
revenues must first come in the
door. And it stands to reason that
as revenues climb higher, earnings
will typically follow. So, clearly
revenue growth and share price
appreciation often go hand-in-hand.
Each of the companies on the list
above has delivered impressive
double-digit revenue growth over the
past five years, but body armor
maker Ceradyne is far and away the
leader of the group. Driven by
robust demand for its products, the
firm's revenues have soared from
just $45 million in 2001 to more
than $660 million in 2006. That, in
turn, has pushed the firm's annual
earnings from $0.20 per share to
$4.69 per share over the same
period.
Not surprisingly, investors who
spotted this growth trajectory have
been well rewarded -- shares of CRDN
have soared more than +2,500% over
the past five years.
In the June 2007 issue of
StreetAuthority.com's
Half-Priced Stocks
newsletter, Editor Nathan Slaughter
embarked on a search to find the
next Ceradyne. Along with strong
revenue growth, he narrowed the
field using a number of other
related criteria, including
scaleability and capital efficiency.
Eventually, he identified five
standouts -- all with superior
annualized revenue growth of around
+200% or higher. One of these
companies has captured a dominating
60% share of the global computer
webcam market. Another is a consumer
products vendor whose customer base
has swelled from 50,000 to 800,000
over the past few years -- but has
barely even cracked its potential
market. The stock skyrocketed over
+1,000% in 2005, yet is still
sharply undervalued today.
To learn more about
StreetAuthority.com's premium
Half-Priced Stocks
newsletter, and to read complete
profiles of the companies mentioned
above,
please visit this link.
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