Key Fundamentals: Sales, Margins, Return On Equity(4)

It All Starts With Sales(3)


Take a look at some companies that have done just that:

Nokia

Nokia began a 630% jump from March 1998 through December 1999 and continued rising into 2000 after the wireless-phone maker reported sales gains of 9%, 12% and 19% in the three quarters leading up to the big move.

Earnings were rising sharply during this period, too.



Home Depot

Home Depot made a 698% move from June 1982 to June 1983.

Its sales grew 104%, 158%, 191% and 220% respectively over the four quarters leading up to this major stock-price jump.


EMC Corp
EMC, the maker of memory chips, rose 512% from September 1992 to October 1993 as sales in the four quarters before this huge move rose 30%, 46%, 54% and a hefty 267%.



How high should sales growth be?

The three most recent quarters should each have strong sales growth of at least 25% compared to their year earlier quarters.

Otherwise, sales growth should be accelerating in the last three consecutive quarters.