Superperformance Stocks By Richard Love Pdf _verified_ Official

| Step | What to Look For | Why It Matters | |------|------------------|----------------| | | $500 M – $5 B (mid‑cap) | Large enough for liquidity but small enough to retain growth upside. | | 2️⃣ Revenue Growth | ≥ 15 % YoY for the last 3 years (or accelerating) | Demonstrates a product/service that’s gaining market share. | | 3️⃣ Earnings Momentum | EPS growth ≥ 20 % YoY, with positive earnings surprise in the latest quarter | Shows management can convert revenue into profit and that analysts may be under‑estimating the business. | | 4️⃣ Return on Capital (ROIC) | > 15 % (preferably > 20 %) and stable or rising | Indicates a durable competitive advantage (the “moat”). | | 5️⃣ Valuation Gap | Price‑to‑Earnings (P/E) below the 5‑year historical average and Price‑to‑Book (P/B) < 2.0 | Provides the classic “margin of safety” buffer. | | 6️⃣ Insider & Institutional Ownership | Insider ownership ≥ 5 % and institutional ownership < 30 % | Insiders have skin‑in‑the‑game, while limited institutional ownership suggests the stock is still under the radar. |

*CAGR = Compound Annual Growth Rate (including dividends reinvested where applicable). superperformance stocks by richard love pdf

Some critics argue Love’s criteria are too restrictive, leading to false negatives (missing stocks like early Amazon or Tesla, which had negative earnings for years). Others note that in today’s algorithmic and options-driven markets, volume confirmation patterns differ. Nevertheless, the core idea — finding high-quality growth with institutional demand and technical strength — underpins the strategies of later investors like William O’Neil (CAN SLIM). | Step | What to Look For |

Superperformance stocks often emerge in leading industries during the early-to-mid stage of an economic or technological cycle. Love studied groups like electronics, pharmaceuticals, and later retail and software. He advises investors to rank industry groups by relative strength and focus on the top 10–15% of groups. | | 4️⃣ Return on Capital (ROIC) |