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  #11  
Old 12-02-2005, 02:45 PM
DesertCat DesertCat is offline
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Join Date: Aug 2004
Location: Scottsdale, Arizona
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Default Re: Evaluate a noob\'s Investopedia portfolio and ideas please?

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Wow thats a lot of good stuff...thanks a lot.

For #4 its not analyst opinions--I agree with you on those. Supposedly interest coverage = the ratio of earnings before interest and taxes to interest payments.

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When you get around to it, you'll find Intelligent Investor talks quite a bit about proper interest coverage, coming from a conservative perspect.

Also you should either screen for or review ROE (return on equity) or a similar metric (Return on Assets, Return on Invested Capital). Essentially, the returns a business earns divided by how much capital it requires to run the business gives you insight on how good a business it really is, i.e. protected from competition.
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  #12  
Old 12-05-2005, 04:55 PM
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Default Re: Evaluate a noob\'s Investopedia portfolio and ideas please?

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Some small stocks I like that fit this approach are CREE and PRAA. Both are leaders in industries that I expect to grow very rapidly in the next decade (LEDs and debt collection, respectively), and still have low PEs despite this growth potential.

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PRAA's up 8% today on news that it closed a favorable credit deal to expand its purchases of consumer debt. It's still a good buy.
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