AAII Stock Ideas: Oberweis Octagon Strategy

Investing in Small Companies Using the Oberweis Octagon Screen

  • Rapid annual growth in revenue (sales)
  • Rapid annual growth in pretax income
  • “Favorable” recent (quarterly) trends in revenue and earnings growth, ideally showing acceleration
  • Low price-earnings ratio in relation to underlying growth rate
  • Low price-to-sales ratio
  • Strong price strength relative to the market
  • Products or services that offer the potential for strong future growth
  • Review of company financial statements, especially the footnotes, to attempt to identify future problems

Small Companies

Growth in Revenues and Earnings

Early Earnings Acceleration

Value Elements: Low Relative Price-Earnings Ratio and Low Price-to-Sales Ratio

Strong Price Strength Relative to the Market

Future Growth Potential

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
American Association of Individual Investors

American Association of Individual Investors

48 Followers

Since inception in 1978, the nonprofit AAII has helped over 2 million individuals build their investment wealth through programs of education and publications.