Research is obviously an important part of findings quality stocks with competitive advantages that end up having extensive price runs. But i’m beginning to believe there are ways to significantly cut down on the research you need to do.
First of all, a stock screen that only returns stocks with earnings growth in the last 3 quarters is a great way to do this. Won’t you miss some great breakout stocks though? Yes you probably will but i’m starting to realize that investors will often times neglect a company with a strong pipeline and potential (INO) until significant developments occur that cause earnings to grow. Now the earnings can still be negative, but if revenues, earnings, and future prospects such as strong medication pipeline and partnerships with big companies exist, investors can come piling in.
That being said, the stock would still begin to show up in the EPS scan probably well before the huge price run begins. We’ll see if INO plays out the way some think it will.