Parsing The Forbes Best Small Companies List
Jae Jun | Oct 14, 2013 12:00PM ET
I say this every year, but if you want stock ideas with good growth potential, you need to check out the annual write about as many as possible .
For three years, I haven’t been able to finish it once, but now is another chance to redeem myself because the 2013 is out.
The methodology used to pick the stocks that make the list is quite simple.
- annual revenue between $5 million and $1 billion
- stock price no lower than $5 a share
- excluded financial institutions, REITs, utilities and limited partnerships
- rankings are based on earnings growth, sales growth and return on equity in the past 12 months and over five years
- dropped thinly traded names and those with fuzzy accounting or major legal troubles
- factored in stock performance versus each company’s peer group during the last year as of Oct. 1
- financial data is pulled from Reuters
- fundamentals via FactSet
How did the stocks do?
The 2012 companies appreciated 32% on average. 3% better than the Russell 2000 index.
That’s impressive because it’s a list of 100 stocks. Not a concentrated list of just 10 stocks.
The 2013 List of Companies An excel file with the 100 companies is provided at the bottom. Fundamental data was compiled using the OSV stock analyzer.
Here are a few ideas you can try to narrow the stocks down further.
- Filter the stocks closest to its 52 week low – rather than analyze the ones that are already up 125% YTD like QCOR, start with the ones at the bottom of the barrel.
- Filter based on cheap fundamentals such as P/FCF
- Go through the companies with zero debt
Jae Jun is the founder of Old School Value on a mission to provide practical and actionable value investing tools, tutorials and educational material.
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