In contrast to me previous post, TMF published another article on 12 Aug 2010 profiling another 3 growth stocks. Lee Samaha suggested: SDL, DNO and NCC. Over a 1-year period, SDL was up 14%, DNO was up 18%, and NCC was up 64%. All of them beat the Footsie, which is down 3%.
What is interesting about the "good" and "bad" suggestions is the level of debt.
Let's look at the bad suggestions. CNT had net debt of 97m against operating cash of 0.3m for interims. SPI had net debt of 118m against operating cash flows of 35m. Both of those companies failed. RM, OTOH, had next cash of 8m; and it's still going. RM currently trades on a PER of 6.4. It is disquieting to see that there have only been director sales during YTD.
On the good suggestions, SDL had net cash of 53m, and DNO had net cash of 12m. NCC has net debt of 20m, but its operating cash flow is 17.9m. SDL currently trades on a PE of 17.5, DNO on a PE of 14.7, and NCC on 18.3.