HIGH GROWTH STOCKS - Screener (2024)

FAQs

How to screen for high growth stocks? ›

Growth investors tend to favor smaller, younger companies poised to expand and increase profitability potential in the future. Growth investors often look to five key factors when evaluating stocks: historical and future earnings growth; profit margins; returns on equity (ROE); and share price performance.

Choose financial metrics: The main characteristic of a growth stock is revenue growth. High-growth companies increase their annual sales by at least 20% so add to the filter this requirement. Also, high-growth stocks typically trade at premium valuations.

Key Takeaways. Growth stocks are those companies expected to grow sales and earnings at a faster rate than the market average. Growth stocks often look expensive, trading at a high P/E ratio, but such valuations could actually be cheap if the company continues to grow rapidly which will drive the share price up.

Investors generally assess current earnings by looking to a price-to-earnings (P/E) ratio that compares current stock price to company earnings. Growth companies tend to have higher P/E ratios, meaning their stock is priced significantly higher than average based on company earnings.

Amazon (AMZN)

The Amazon share price had an initial spike after two years but tailed off in 2002. The dot.com boom followed, and Amazon became the world's largest retailer. That's an average stock market return of over 287,000%.

Generally, the asset allocation for a growth portfolio would include 20% defensive assets (cash, bonds, fixed interest) and 80% growth assets (shares, infrastructure, listed property). For more helpful articles, visit the Education HUB.

Who is the father of growth investing? ›

Thomas Rowe Price, Jr. has been called "the father of growth investing" because of his work defining and promoting growth investing through his company T. Rowe Price, which he founded in 1937 and is now a publicly traded multinational investment firm.

Key Takeaways

A high price-to-earnings (P/E) ratio implies that the market expects a company's earnings to continue growing. Consistent improvements in the return on equity (ROE) ratio show that a company's value is continually rising and that this value rise is successfully converting into profits for investors.

The first step in analysing growth stocks is to look at the company's financials. This includes things like revenue, earnings, and cash flow. It is important to look for companies with a strong track record of revenue and earnings growth and a positive cash flow.

Price to Earnings ratio is one of the traditional methods to analyse the company performance and predict the prices of the stock of the company. This ratio considers the market price of the shares of the company and the earnings per share (EPS) of the company.

Investors should look for indicators that successful companies have, such as accelerated sales and earnings growth and high levels of insider buying. It's important for investors to analyze the financial statements of companies to identify any areas that signify strengths or weaknesses.

One way to do that is by examining the stock's simple moving averages (SMAs) – a simple arithmetic average of prices over some timespan. And if a stock's shorter-term moving average is above a longer-term moving average, then that usually indicates a general uptrend in price.