Archive for the 'Recovery Growth' Category
April 1st, 2008
Recovery growth worth exploring in tough market
I’ve been trawling through Richard Driehaus’s recovery growth trades and here are a few things I’ve learnt
Continue reading "Recovery growth worth exploring in tough market"
September 7th, 2006
Large-cap growth finally coming good?
People have been talking up the prospects of large-cap growth stocks for some time now. Are they finally coming good?
Continue reading "Large-cap growth finally coming good?"
August 21st, 2006
A five-point health check for fallen growth stocks
The market is turning and many commentators say buy beaten-down growth stocks to make big profits. But investors should put …
Continue reading "A five-point health check for fallen growth stocks"
July 19th, 2006
10 fallen growth stock gems
Oakmark’s Bill Nygren says fallen growth stocks are the place to invest right now. While a value investor his portfolio …
Continue reading "10 fallen growth stock gems"
Recovery Growth Explained
This method invests in growth companies that have been sold off because of a general market decline or specific factors, such as an earnings miss, product delay or resignation. Just like driving a race car at top speed, fast-growing companies have a greater probability of making mistakes. Management in all out quest for expansion can ignore fundamentals such as cash flow. The other common mistake is creating huge expectations among investors that aren’t lived up to, causing the shares to crash. But that can provide an opportunity as share prices often over react. Despite earnings misses, the core business may not be broken. This strategy is highlighted by Ken Fisher (Philip’s son) in his book SuperStocks, which outlines how companies can have a ‘glitch’ that puts them out of favor and leave them on attractive valuations.
