Microsoft strongly encourages users to switch to a different browser than Internet Explorer as it no longer meets modern web and security standards. Therefore we cannot guarantee that our site fully works in Internet Explorer. You can use Chrome or Firefox instead.
Any experienced investor should look for super stocks or companies growing fast and delivering sizable investment returns. They can outperform the market and provide considerable gains in a relatively short period. These companies can bring unbelievable returns when bought at the right price. A good buy has specific criteria that you should be looking for, especially if you’re a beginner in this type of market.
In the market, certain stocks have delivered a consistently strong performance. We refer to these as super stocks. They are not easy to find. Stock market investing can be risky. But in this article, we’ll discuss how you can increase your chances of spotting such investments.
The top ten US stocks that gained the most in the past decade are in the energy, chemical, healthcare, soda, machinery, and shipping industries. These industries have a collective market capitalization of at least a billion each.
When analyzing stocks, looking into the histories of these companies is vital. In this case, the last decade’s losers can often become the following winners for the coming decade and vice versa. It’s also important to look at the specific company as well as the industry.
International stocks are also worth betting on. Incredibly fast-growing Asian stocks are a good option if looking to add some foreign options to your portfolio.
It’s always best to do your homework and/or seek sound advice from financial experts and get updated on the best financial instruments. You can also get more information from online sources like Money Morning to make the best out of your investments.
2. Make Sure They Have Customer-Centric Team
Super stocks should not be just after the profit but be more concerned about their customers’ thoughts on their products, thus improving research and development.
Large-cap stocks are businesses with a market capitalization worth USD$10 billion or more, which means a super stock this big is managed by quality management teams. The board of directors is likely to have combined years of experience in their field of work. Having a quality management team is one key factor that supports the company growing even more.
Some companies mistake taking out discounts and enlarging their profit, while others understand that volume and repeat sales fit long-term plans. They focus on longevity instead of extreme profiteering, leading to their downfall.
The leaders of super stocks are said to be long-term greedy. Choosing profit margins over volume makes the company weak against a competitor that will run operations for lower margins. CEOs should concentrate on a scale at the start and focus on profits once the market has matured.
3. Look For Steady Financial History
In a book entitled ‘Super Stocks,’ well-known investor Ken Fisher looks for a stable financial history. According to him, super stocks have ample emergency budgets. It’s also defined as working capital that the business can use to support the company amidst financial losses.
Another thing to look into is if the company has a debt risk. A super stock has 40% less of its total assets than is supported by debt.
Fisher then elaborated the criteria of what having a solid balance sheet means and how debt adjustment occurs and divides the company’s current ratio by four. Companies with a 0.8 factor of debt adjustment and above are approximately equal to a minimum asset at a 0.6 ratio of assets.
A super stock company must have new ideas in the form of new products that can help accelerate profit growth. The business must have an action plan that lowers production costs so that when the expenses are lower, the higher the company’s unit profit will be. As a result, share prices generally increase since profits are steadily rising.
The stocks you’d want should be in the uptrend since companies with a good track record tend to rise. They can go lower if the prices decrease and the profits show no other direction than going down. With increasing profits, the share price of a stock increases and is less likely to sell for cheap.
Conclusion
There are thousands of stocks available for trading in today’s market. However, only a small segment can be considered super stocks. Thus, investors with enough capital to spare should gather as much information about a stock. Follow the tips above to increase your chances of making your investments work out for the best.
This page uses Cookies. For proper functioning of the page Cookies are needed. You agree to using Cookies by clicking "OK".
More infos can be found in our Privacy declaration.
If you disagree this service is only available in very limited ways.
