Course 404: Aggressive-Growth Stocks
What Are the Trends in Growth Rates?
In this course
1 Introduction
2 Is Cash Flow in Line with Earnings?
3 Has Growth Hurt the Balance Sheet?
4 What Are the Trends in Growth Rates?
5 How Consistent Is the Company's Growth?
6 Are Free Cash Flows Positive or Negative?
7 How Much Does the Company Earn on Its Capital?
8 How Has the Stock Performed?
9 How Expensive Is It?
10 How Does the PEG Ratio Compare with Those of Similar Firms?
11 Conclusion: Knowing the Odds

Growth rates over a long period (like three or five years) can hide important year-to-year trends. Growth may be extremely erratic, or it may be slowing down. Indeed, Starbucks is not expanding as rapidly as it was a few years ago. The company's annual sales growth peaked at 71% in 1993, clocked in at 50% in 1996, and was less than 30% in 1999. From the company's annual report, we learn one reason for the slowdown: Same-store sales growth has dropped from almost 20% in the early 1990s to less than 10% recently. Ten percent is still pretty good, but the downward trend is not.

Next: How Consistent Is the Company's Growth? >>

Print Lesson |Feedback | Digg! digg it
Learn how to invest like a pro with Morningstar’s Investment Workbooks (John Wiley & Sons, 2004, 2005), available at online bookstores.
Copyright 2015 Morningstar, Inc. All rights reserved. Please read our Privacy Policy.
If you have questions or comments please contact Morningstar.