Spotting the Next Super Stocks

Jon Markman had an excellent article on MSN Money listing the top stocks of the past decade. (It’s counterintuitive.) As he says, what makes stocks go up is

not glamorous CEOs, hyped-up investor-relations campaigns or sexy products, although none of those things will actually hurt. It's mainly about finding an underappreciated niche that's small enough to be ignored by much larger players -- and then developing a pipeline of products that can be sold for many years at relatively high margins to an increasing number of customers. All of these market-leading companies crush their peers on returns on capital and pricing power: business fundamentals that allow them to continually grow into valuations that seem perpetually cheap.

That said, only two of the stocks mentioned in the article faired well in my preliminary valuation, Chico’s FAS (CHS) and Expeditors International of Washington (EXPD).

Tags: Business

Created at: 19 December 2005 12:12 AM