Course 404: Aggressive-Growth Stocks
How Has the Stock Performed?
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

Of course, there's a good chance the company will earn solid returns once it enters a more mature phase and the costs of expansion become less burdensome. That's exactly what the market expected of Starbucks until recently: Its shares outperformed the S&P 500 every year between 1993 and 1998, compounding at an annual rate of 35% over that time span. But an aggressive-growth stock can get hammered if it doesn't meet lofty expectations. That's what happened to Starbucks in mid-1999, when the company announced that its growth would be slowing and that it would start concentrating more on the Internet rather than on selling coffee. Its stock tanked and finished the year down 14%.

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