Fire Your Stock Analyst!

372Fire Your Stock Analyst!return on capital (ROC), 194–95return on equity (ROE), 189–94Proprietary technology/production processes,119–20ProSearch (Wall Street City), 28Pump and dump, 327–31Purchase and sales of investments, 340Purchase license, 339–40QQualcomm, 119, 246Quality of earnings, 142Quarterly cash flow reports, 205Quarterly reports, 333Quick hype checks, 330–31current ratio, 331market capitalization, 330price, 330price/book ratio (P/B), 330–31TTM sales, 331Quick prequalify, 4–7, 251–60cash flow, 6, 257checking the buzz, 7, 259–60company and industry overview, 5concentrate on the strongest candidates(COSC), 251–55float, 6, 256–57historical sales and earnings growth,6–7market capitalization, 5Multex Investor:Company Overview report, 252–53Highlights report, 257Ratio Comparison report, 258Snapshot report, 253–54, 256–57news sites, 260ratio comparison, 258–59trading volume, 6, 255–56valuation ratios, 5–6Quicken, 27–28growth screen, 28–32analysts consensus ratings, 30current ratio, 31latest quarter earnings surprise,30long-term debt/equity, 31market capitalization, 29next five years estimated earningsgrowth, 30percent institutional ownership,32price to sales ratio, 29return on assets, 31revenue, 31revenue growth, 30screen results, 32share price, 31–32Stock Search, 28value screen, 32–34analysts consensus ratings, 32–33long-term debt/equity, 33market capitalization, 32percent held by institutions, 34price to sales ratio, 32relative strength, 34revenue, 33screen results, 34share price, 33RRambus, 119Rate, bonds, 163Rating agencies, 159–60Realistic earnings growth estimates, 75Red flags, 24, 225–28, 349accounts receivables and inventoriesa, 313–14accounts receivables and inventoriesas, 217–21, 226, 313–14cash flow statement, 225–28detecting, 10, 211–32, 311–15accounts receivables, 217–21cash flow statement, 225–28growth investing, 311–15inventory analysis, 221–25pension plan income, 228–29sales growth trends, 213–17yellow flags, 229–32net income vs. operating cash flow,313pension plan income, 314sales growth, 311–12value stock analysis scorecards, 346yellow flags, 314–15capital expenditures vs. depreciation,314–15income tax rate, 315Regulation FD, 64Reported earnings, 323–26analysts’ research, 326generally accepted accounting practices(GAAP), 325guidance, 325–26operating margin, 325