Screening Results (October 2015)
Best Small Company Preview
by Mark Robertson
One of the most powerful lessons we’ve learned from tracking the Forbes Best Small Company list every October is that QUALITY MATTERS. Over the long term, we want out-sized returns from our smaller, more speculative, and faster-growing companies and the best protection against the brutal downside of smaller companies is … quality.
Manifest Investing — Best Small Companies (2015)
Best Small Companies (10/8/2015). Screening results as we search for high-quality faster-growing small companies. The Forbes list will be out during October. Sorted by MANIFEST Rank (PAR & Quality) with minimum growth forecast of 12%. * – not covered in Value Line Investment Survey standard edition.
It will be interesting to see how many of the featured companies end up on the Forbes list. This is certainly a list of candidates that can bolster the overall average growth forecast of our portfolios with an average sales growth forecast of 16.3%. The average return forecast is 18.2%.
Value Line is quite a bit less exuberant with an average low total return forecast of 8.5%. Morningstar is a little more enthusiastic with an average price-to-fair value ratio (P/FV) of 85%. We take lower expectations for early stage companies with a grain of salt whenever Value Line or Morningstar are providing the analysis. S&P has an average P/FV of 82%.
The outlook for the year ahead from this group is optimistic with the ACE forecast at 24.2%, S&P at 25.3% and our Goldman Sachs benchmarking checking in at 17.6%. It’s all good.
Several of these companies have appeared on the Forbes and/or Fortune lists in the past — some actually discovered by us using those resources.
Which ones have you studied? Which ones do you own? Are any of the names new to you? Welcome to October and small company discovery. Oktoberfest is for good hunting.