Date updated:01-16-2007
In Jim's book, "Mad Money", he mentions that he likes to look for growth stocks that have two criteria:
1. Stocks trading for less than 2 PEG and
2. growing earnings faster than their sector is growing.
PEG = P/E divided by growth. When PEG is low its indicative that Wall Street is not taking growth into account as much as they possibly should. In the screen below we focus on forward P/E and anticipated forward growth.

-
VCLK
Valueclick - $10.00
- +1.11%
- $9.89
Online marketing company ValueClick has a forward PEG of just 1.45. They had 107% earnings growth last year. Next year: analysts expect VCLK to go from 58 cents in earnings to 77 cents with 22 analysts giving a prediction. By contrast GOOG is 33% growth expected and has a 36 P/E. VCLK 33% growth. YHOO 28% AQNT 24%. ValueClick has a forward P/E of 30.

-
GME
Gamestop Corp - $25.49
- 0.00%
- $N/A
32% growth expected for next year, P/E next year of 21. so 21 divided by 32 is a 0.65 PEG. By contrast, BBY is expected to grow earnings from 2.77 to 3.17 or 14% RSH from 74 to 90, 21% growth.

-
MDRX
Allscripts-misys - $20.07
- 0.00%
- $N/A
MDRX is expected to grow earnings from 72 cents in 2006 to 1.08 for the year ending Dec 07

-
IDSY
I.d. Systems - $3.20
- -0.31%
- $3.21
Sells radio-frequency identification systems (RFID) for tracking industrial equipment like, for instance, forklifts. Supervisors can monitor fleets of equipment and workers reducint fleet maintenance costs, increasing safety, etc. Customers include Wal-mart, Ford, Target, and the US Postal Service. "The company goes for 56 times earnings but analysts expect earnings to grow 86% next year...there is no reason to thank that growth will stop in 2007."

-
AMTD
Td Ameritrade Hol - $20.91
- -0.48%
- $20.92
28% earnings growth expected by analysts but only a 12 forward P/E ratio. , Analysts expect the company to earn 1.12 per share in 2007, up from 87 cents.

-
GMCR
Green Mountain Co - $65.01
- 0.00%
- $N/A
50% growth expected. Analysts expect the coffee maker to make 1.61 this year, up from 1.09 in year ending Sep 2006. 20% rev growth. , exceeded expectations the past 3 quarters since going public. SBUX, by contrast, has about 20% earnings growth. GMCR has a Forward P/E of 33.

-
FMCN
Focus Media Holdi - $13.10
- -2.02%
- $13.06
The electronic billboard company in China is expected to grow earnings from 1.77 to 2.61.

-
IDCC
Interdigital - $23.56
- +0.81%
- $23.30
expands share buyback plan. Has already bought back 6.4mm shares for $187mm.
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