I have created a new “fund” based on the following criteria:
- Revenue Growth Rate Last 5 years > 15%
- Return on Equity (TTM) > 15%
- EPS Growth History Last 5 years > 15%
- EPS Growth Long Term (3 to 5 years) > 15%
I believe that these criteria will deliver results superior to investing in the S&P as these stocks have high potential for greater growth as well as a proven track record of increasing returns. Since I believe Return on Equity (ROE) is the best indicator of future results, I have picked the top 20 of stocks, sorted in descending order of ROE:
|
Symbol |
Description |
Revenue Growth Rate Last 5 Years |
EPS Growth History Last 5 Years |
Return on Equity (TTM) |
Est. EPS Growth Long Term (3 to 5 Years) |
|
ALGN |
Align Technology Inc |
25.87% |
25.55% |
80.12% |
19.01% |
|
FTNT |
Fortinet Inc |
22.86% |
65.41% |
47.30% |
19.24% |
|
ADBE |
Adobe Inc |
21.82% |
54.27% |
44.21% |
16.67% |
|
SLM |
SLM Corp |
19.46% |
30.72% |
33.35% |
20.00% |
|
LULU |
Lululemon Athletica Inc |
17.23% |
24.37% |
29.23% |
18.06% |
|
NVDA |
NVIDIA Corp |
18.45% |
32.21% |
28.82% |
22.05% |
|
NFLX |
Netflix Inc |
29.82% |
83.76% |
28.68% |
44.43% |
|
ASML |
ASML Holding NV |
17.33% |
21.47% |
26.86% |
17.10% |
|
FB |
Facebook Inc |
36.82% |
50.83% |
25.42% |
21.50% |
|
BLDR |
Builders FirstSource Inc |
35.33% |
60.04% |
24.06% |
18.80% |
|
LAD |
Lithia Motors Inc |
18.65% |
17.70% |
22.97% |
21.90% |
|
VIPS |
Vipshop Holdings Ltd |
32.09% |
33.36% |
21.23% |
19.25% |
|
FND |
Floor & Decor Holdings Inc |
28.47% |
54.41% |
20.93% |
27.12% |
|
OLLI |
Ollie’s Bargain Outlet Holdings Inc |
17.16% |
31.08% |
20.08% |
17.70% |
|
MPWR |
Monolithic Power Systems Inc |
17.32% |
22.11% |
18.91% |
25.00% |
|
EPAM |
Epam Systems Inc |
25.73% |
26.45% |
18.86% |
19.20% |
|
BABA* |
Alibaba Group Holding Ltd |
46.24% |
42.09% |
18.06% |
22.40% |
|
PYPL |
PayPal Holdings Inc |
17.24% |
43.22% |
17.97% |
22.99% |
|
GOOGL |
Alphabet Inc |
19.65% |
19.92% |
17.51% |
16.81% |
|
MKSI |
MKS Instruments Inc |
23.42% |
22.62% |
15.97% |
30.33% |
*note: this is a Chinese stock, so I advise caution. And the Chinese government has been hostile to the founder of the company, Jack Ma. So if you are uncomfortable with this choice, I suggest taking #21 of the list, PagSeguro Digital Ltd. (PAGS), a Brazilian IT company.