Business Week

Thursday, December 30, 2004 Stock Screen: The Top 10 Screen Stock Screen: The Top 10 Screen
This was the latest news item on DHB and a WSJ article (SmartMoney)

Here is the text of the article:

Top Performers

December 30, 2004; Page D2

Few Wall Street adages are more difficult to heed than "run with your winners." The temptation for many investors is to sell their top-performing stocks quickly to lock in gains, while hanging on to sagging shares in hopes they'll bounce back.

Pros advise just the opposite, urging investors to sell losers quickly and without remorse, while holding on to or even adding to winning positions.


About half of these top performers of 2004 still have reasonable PEG ratios.

A good place to look for the most promising stocks for 2005, then, might be among the biggest gainers of 2004. We recently screened through 8,000 companies for just such winners. Our prerequisites were few: each company had to have been profitable and have posted sales of at least $300 million during the past 12 months, have a share price of at least $5 and be covered by at least one analyst. (We also excluded basic-materials companies from our search to keep the steel industry, a major beneficiary of the weakening dollar, from dominating the results.) The top 10 companies in terms of year-to-date stock performance are on our list.

Which look poised to continue their run? Because of their relatively low price/earnings-to-growth, or PEG, ratios, four companies caught our attention: Coldwater Creek Inc., Bluegreen Corp., Navarre Corp. and DHB Industries Inc. The PEG ratio is calculated by dividing a company's price/earnings ratio by its projected long-term earnings-growth rate. That makes it useful for assessing the price of a fast-growing company's shares relative to it prospects. The Standard & Poor's 500-stock index has a PEG of around 1.6 right now. Stocks with PEGs less than that can be considered less expensive than the overall market. Those with PEGs near or below 1.0, in particular, are worth a closer look.


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