One of my favorite Warren Buffett quotes is "the investor of today does not profit from yesterday's growth." While there's plenty of money to be made on companies with long and storied histories, those with strong growth prospects in the coming years are more likely to provide investors with truly exceptional returns.
One way to analyze a company's future is through its Forward EPS Long Term Growth, which is essentially a consensus estimate of the company's expected annual growth rate over the next three to five years. Cross referencing analyst ratings with companies with high expected growth can provide investors with a good starting point on analyzing good growth investments.
The companies listed below have several things in common: they're all in the aerospace/defense industry, they have forward EPS growth of at least 25%, if not more, and analyst consensus is either "Buy" or "Strong Buy" according to the First Call Consensus Recommendation, which collates multiple analyst opinions into the mean recommendation.
This list is intended to be a starting point for further research -- do you think the companies named might be good candidates for a growth portfolio? Why or why not?
1: Taser International Inc (TASR)
TASER International develops, manufactures, and sells electronic control devices to law enforcement, military, corrections, private security and personal defense markets. Taser's market cap is $293M. The First Call Consensus Recommendation is "Buy."
Taser's forward long term EPS growth is estimated at 30%. It's worth noting that EPS has been growing consistently and has accelerated as of late: 11.38% on average over the past five years and 26% on average over the past 3 years.
2: Transdigm Group Inc (TDG)
TransDigm Group is a global designer, producer and supplier of aircraft components for use on commercial
