  |
|
Investment Strategies of Famous Investors The Sleuth
They all went on to rise between 6,184-23,666%. And today, Price's company manages over $269 billion in assets. Jim Oberweis, a famous portfolio manager from Chicago, used the same investment strategy that Price did. Since 1987, his flagship fund has averaged a 12.48% gain. A $10,000 investment with Oberweis in 1987 is now worth $111,833. ******************************** Why This $12 Stock Could Hit $800 The CEO of this small-ca coal stock grew his last business from $30 million to over $2 billion in 10 years. That's a gain of 6,600%. Right now his newest company trades for just under $12 a share. If it grew 6,600% as well, it would trade for $800 a share. Sound crazy? The CEO doesn't think so. He just bought 20,000 shares! Find out why... ******************************** The investment strategy that made both of these men (and their investors) wealthy many times over is known as GARP -- growth at a reasonable price. GARP combines value and growth investing into one neat little package. A GARP investor wants to own high-growth companies. But he doesn't want to overpay for the right to own that growth. For instance... Price bought companies with expanding profit margins, quarter-over-quarter sales increases and a history of accelerated earnings growth (both year over year and quarter over quarter). If a company met these requirements, he wasn't so concerned if it happened to have a high P/E ratio or not. The theory was simple... If a company was growing quickly enough, it would narrow the gap between earnings and price over time. Oberweis has a similar, but more stringent, philosophy. As he said in an interview a few years ago, "We're looking to buy companies for a P/E not higher than half the rate of growth. So if a company is growing at 50% annually, we don't want to pay a P/E higher than about 25." In addition to buying growth companies for a reasonable price to earnings, Oberweis also insisted on:
These criteria make up what Jim calls his "Oberweis Octagon." Each investment decision must pass his octagon test before it makes it into his portfolio. And while the name is somewhat silly, the results he has racked up are nothing to snicker at. Some people would sell their firstborn son for a 12% annual return over 19 years. ******************************** This One GARP Stock Could Pay for Your Kid's College Education It has more than a 50% share of the growing $560 million business. And over the last four years, its sales have grown at a compounded annual growth rate of 43%. If you made 43% a year for the next 10 years, a mere $5,000 investment would be worth $178,784. This stock offers that kind of gains. But only for those who get in now. ******************************** So what stocks might Price and Oberweis buy today? To answer that, I created a GARP screen of my own (based on both Price's and Oberweis' investment criteria). I looked for:
Only five companies came up on this GARP screen. They are:
If you are looking for a short list of growth stocks at reasonable prices, I would start here. Each of these companies has awesome growth numbers. And unlike many so-called growth opportunities, these actually have real earnings and improving profit margins to boot. That says they have established products, services or brands that command premium prices. It also says management runs the business with the shareholder in mind. ******************************** $161,118.95 Gains in 1 YEAR Options guru Steve Sarnoff had a perfect record in 2005: He recommended 30 plays and EVERY SINGLE ONE saw gains -- totaling a possible $161,118.95... You could join a small group of readers that has already had the chance to reap $1 million in profits... Just check out this special report... ******************************** That is a rare combination on Wall Street these days. Just remember one thing if you decide to invest with a GARP bent... Both Oberweis and Price made their fortunes by holding onto their stocks for years, not months or weeks. You don't walk away with 23,000% gains in a few weeks. As Price once famously declared:
Good investing,
|
|
|
James Boric is the editor-in-chief of Small-Cap Strategy Report and he constantly scours the market for fundamentally sound small-cap companies with tons of growth potential... <click here for full bio> |
|
