Optical Cable Corporation: EQUITIES Magazine

Date: Thu, 20 Nov 1997 23:48:41 GMT Server: Apache/1.1.1 Content-type: text/html Content-length: 8323 Last-modified: Sun, 14 Sep 1997 13:04:03 GMT Optical Cable Corporation: EQUITIES Magazine

July/August '97 EQUITIES Magazine

America's Fastest Growing Companies Optical Cable Corporation is proud to be #218 of the Fastest-Growing
NASDAQ Companies listed in the July/August Issue of EQUITIES Magazine.

It's one thing to buy growth. An acquisition here, a merger there and--poof-—you're the head of a fast-growing firm, judging from the top line. But it's the bottom line that counts. That is why EQUITIES measures profits when ranking the fastest-growing companies in the country. The good managements of the companies on the following tables have proven they can manage growth--be it external or internal-—without sidetracking the operation or miring it in more debt than it can comfortably accommodate. We've ranked these companies based on five-year earnings-per-share growth. The initial computer screen, done by Los Angeles-based William O'Neil and Company, publisher of Investors Business Daily, permits one down 12-month period in earnings per share, as long as it isn't the latest 12 months. This avoids penalizing those who increased total profits, but may have floated additional shares to finance growth or stumbled for a quarter or two. However, the growth screen excludes companies with losses in any of the past five years.

This criteria yielded a record number of companies with five-year average earnings growth of 20%, a benchmark we use to identify managements with a superior long-term performance. In a time when many financial analysts and experts agree that the U.S. stock market is due for a correction, it is comforting to see the accelerating number of public companies with solid earnings growth over the last four years. The number of companies from the New York Stock Exchange making the grade skyrocketed to 250, from a mere 94 in 1993. Thirty-eight companies passed the 20% mark from the American Stock Exchange, up 100% from only 17 in 1993. The Nasdaq Stock Market had the most fast growers, with an impressive rise from 182 in 1993 to 344 today.

Not suprisingly, the technology sector was behind much of Nasdaq's explosive growth, claiming 34 of its top 50. Twenty-one of the top 50 were computer hardware and software firms and peripheral manufactures, shattering any doubt growth the electronic age is beginning to slow its furious pace. Included were established giants still growing such as Microsoft, Intel, Oracle, Cisco and Maxim, joined by this year's number-one performer CDW Computer Centers and relative newcomers, but old EQUITIES favorites such as APAC, American Business Products. CheckPoint, Datastream Systems, Express Scripts, Jack Henry & Associates, SBS Technologies, SOS Staffing, Timberline, Valmont industries and Ultratech Stepper.

Also making a strong showing from Nasdaq were 30 medical firms, including STERIS Corp., Serologicals Corp., Oxford Health Plans, Jones Medical, Mentor and Medcath Inc. Nasdaq was also a good place to find fast-growing banks from spots like Cape Cod, with 30 achieving more than 30% earnings-per-share growth.

While only nine banks made the list from the Big Board, one of those, Imperial Bancorp, finished first with a 132% five year earnings-per-share growth rate followed by Chase's 64%. Naturally, blue chips like Dow and Xerox are there. Also providing real momentum for the NYSE were insurance and finance firms, including AFLAC, Contifinancial Corp., HCC Insurance, Markel, Sierra Health and Titan. Also doing their share were oil-and-gas companies, finishing four in the top 20--Varco, Suncor Energy, Lomak Petroleum and Key Production Inc. Mutual fund managers T. Rowe Price and Franklin/Templeton and brokers Morgan Stanley and discounters like Charles Schwab and Quick & Reilly rode the bull.

In the past. EQUITIES has featured favorable stores on over 70 of these champion growers. Often we were the first nationally or positive when short sellers predicted doom for stars like Alcide, Gentex, Actrade, Apogee, Claire's Stores, CUC, Eagle USA Airfreight, Parametrics, Poe, Pre-Paid Legal Services, Supreme International and Total Tel USA. Like the law of gravity, what goes up must eventually come down: As a company's base grows larger and larger, the annual growth rate gets smaller and smaller. However, many companies are able to manage their growing bases and still stay on a respectable growth track. These are our phenomenal growers, and the 146 list repeaters from our August 1995 issue are in bold throughout the tables.

And remember besides growth looks great in a table, there is consistency and the earnings stability growth factor is listed for each company. Calculated by O'Neil this indicates standard deviation of the variability around the trend line fitted through three to five years of earnings history. It indicates how much earnings varied over the five years of our screen. The lower the stability factor, the more stable and smooth earnings growth was. For example. a stability factor of five means two-thirds of all 12-month earnings fall within a 5% band around the trend line.

Small firms with very high growth rates will come back down to earth, but the rapid climb in between can be profitable. Playing the momentum investing game can have its drawbacks if you only react to earnings releases and estimate shortfalls. The long-term growth should never be ignored for short-term stock gains or you won't be seeing big profits when the company becomes a blue chip.

Optical Cable Corporation is proud to be #218
of the Fastest-Growing NASDAQ Companies listed
in the July/August Issue of EQUITIES Magazine.

To receive additional information on Optical Cable Corporation, via fax, at no charge, dial 1-800-PRO-INFO and enter code OCCF. Or use this link

See the Press Release Index

E-Mail:

Ken Harber, VP Finance - kharber@occfiber.com
Robert Kopstein, President/CEO - kopstein@occfiber.com

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http://www.occfiber.com/public.pdf

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E-mail: sadams@occfiber.com ............... http://www.occfiber.com