The York Water Company (NASDAQ:YORW) has been experiencing accelerated earnings and sales growth over the past five years. Over that time frame the firm has seen earnings growth of 7.10% and sales growth of 3.20%.
Successful investors are usually adept at expecting and reacting to sudden change. Things may be all roses when the markets are riding the bulls higher, but environments shift and can leave investors suddenly in the lurch. When times are good, investors may be well served by maintaining a watchful eye on the portfolio. Becoming complacent when everything seems to be working can become a disaster very quickly without the proper attention. Setting up a plan for different market scenarios can greatly benefit the investor. Routinely studying portfolio contents may help when the need to release some underperformers comes. Keeping close tabs on the portfolio may also help fend off a personal panic if events take a dramatic turn for the worse.
While the firm has enjoyed the upward movement, it’s important to look at analyst expectations and where the company is headed from here. On a consensus basis, analysts are projecting EPS growth of 16.00% for next year and have a $35.00 one year price target on the stock. The stock recently traded at $32.53.
Six Fundamental Characteristics of Great Growth Stocks
#6 Huge Mass Markets – The more potential customers there are, the greater the possibility that both the company, and the investment in said company, will be a success.
#5 Market Dominance/Barriers to Entry – Look for companies who hold patents. This is great barrier to entry, ensuring no competition. Look for companies who dominate the market, blowing away the competition, though market dominance can be harder to measure.
#4 Accelerating Earnings Growth – If a company’s earnings growth rate increases for two consecutive quarters, their growth is accelerating. Faster growth is better growth, and a company whose earnings growth rate is accelerating is an attractive investment.
#3 Triple-Digit Revenue Growth – Companies growing their revenues at triple-digit rates (100% or better) are usually smaller and less known, making them attractive for buying by institutions.
#2 High Profit Margins – In recent decades, high-margin stocks have beaten low-margin stocks by a huge amount.
#1 Top Notch, Innovative Management – All great managers who led their companies to success usually did so by thinking differently. There is no surefire and quick measurement of management talent. When you find a top manager, one with a record of prior success and accolades, you should strike. Top managers usually find a way to overcome obstacles.
Let’s take a look at how the stock has been performing recently. Over the past twelve months, The York Water Company (NASDAQ:YORW)‘s stock was -4.04%. Over the last week of the month, it was -0.64%, 6.05% over the last quarter, and 4.77% for the past six months.
Earnings Per Share (EPS):
EPS is what each share is worth and indicates how much money their sharehoders would acquire if the company was to pay out all of its profits. Earnings Per Share is computed by dividing the profit total by its share total. If a company’s profit is $800 million and there are 40 million shares, then the EPS is $20. EPS is a fantastic way to compare and contrast companies in the same industry. When a company shows a steady upwards earnings trend, it is a good indicator that the company will dominate companies with a more volatile earnings trend.
The York Water Company (NASDAQ:YORW)’s EPS is 1.04. Last year, their EPS growth was 10.60% while their EPS growth over the past five years is 7.10%. Analysts are predicting The York Water Company’s stock to grow 16.00% over the next year and 4.90% over the next five.
One way to completely avoid market mistakes is to not invest at all. Of course, that could end up to be the greatest mistake of all. Investors will occasionally make some mistakes, as that comes with the territory. The key as with most things in life is to figure out how to learn from past mistakes and use that knowledge to make better decisions going forward. Pinpointing exactly what went wrong may help shed some light on what needs improvement. Sometimes, investors will suffer losses and become discouraged right out of the gate. The tendency is to then try to recoup losses by taking even bigger risks which can lead to complete disaster. One of the biggest differences between successful investors and failed investors is the willingness and ability to learn from past personal mistakes.
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