R&D is an excellent predictor of earnings growth, and stocks with low price-to-R&D...

|By:, SA News Editor

R&D is an excellent predictor of earnings growth, and stocks with low price-to-R&D ratios generally outperform. Smart Money's Jack Hough likes three companies which spend at least 10% of sales in R&D, have boosted R&D spending by at least 10% in the past year, and have price/R&D ratios below 30: KLA Tencor (KLAC), Abbott Labs (ABT), Analog Devices (ADI).