Hough also ran a new screen and offered eight companies that might be worth further research:
The eight companies below have P/FCF ratios that are below 15 and in the bottom 25% for their industries. They’ve increased their sales by at least 15% a year, on average, over the past three years, and at a faster rate in the past year than over the past three. Each company has a debt/capital ratio of below 0.5, has posted sales of at least $200 million over the past year and is projected by analysts to boost earnings by at least 12% annually over the next five years.
Survivors of the screen include (ticker, P/FCF, industry):
* Alliance Data Systems (ADS, 11.7, information services)
* Children’s Place Retail Stores (PLCE, 8.3, apparel)
* Digital River (DRIV, 11.1, internet solutions)
* HealthTronics (HTRN, 11.2, medical products/services)
* Heico (HEI, 10.5, defense products)
* Hewitt Associates (HEW, 13.8, human resources services)
* Kos Pharmaceuticals (KOSP, 12.5, drugs)
* NVR (NVR, 9.4, home builder)
Note: data as of 2/17/06
This is just a starting point for your research and we recommend digging deeper if any of these companies appeal to you.