Increasing SalesIs the company growing its sales, and if so, is the sales growth real, or related to one-time events? This means you'll have to read the entire press release to both take in what management said about the quarter, as well as look at the numbers. Did the company experience internal growth, or did it sell an asset or experience some other windfall that makes it seem like it's growing?
Annual growth is required. Year to year there is definite growth in smaller companies.
Improving MarginsThe sales line is improving. Is its cost of goods soldline item, or its selling, general and administrative expense line on its income statement going up at a faster rate? If so, it could be because the company is just entering into a new business or launching a new product and is experiencing some growing pains or paying for some start-up costs. However, this could also mean that the company is doing a poor job of managing its expenses. Management's discussion of the quarterly results will help you glean that information.
New Products
In a short period of time, it's almost impossible to determine whether a product will be a winner or not. However, it could be a big mistake to overlook these stocks, because new products will often garner a lot of attention from both consumers and investors. This often helps move the share price higher in the near term. In addition, the company has probably already spent a huge amount of money on R&D and initial promotions as it positions itself to take in a whole lot of money with fewer (namely R&D) expenses.
Annual growth is required. Year to year there is definite growth in smaller companies.
Improving MarginsThe sales line is improving. Is its cost of goods soldline item, or its selling, general and administrative expense line on its income statement going up at a faster rate? If so, it could be because the company is just entering into a new business or launching a new product and is experiencing some growing pains or paying for some start-up costs. However, this could also mean that the company is doing a poor job of managing its expenses. Management's discussion of the quarterly results will help you glean that information.
New Products
In a short period of time, it's almost impossible to determine whether a product will be a winner or not. However, it could be a big mistake to overlook these stocks, because new products will often garner a lot of attention from both consumers and investors. This often helps move the share price higher in the near term. In addition, the company has probably already spent a huge amount of money on R&D and initial promotions as it positions itself to take in a whole lot of money with fewer (namely R&D) expenses.
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