BetterInvesting Magazine's October Issue Reminds Investors of the Perils of Popularity

Few bargains among stocks on BusinessWeek list

MADISON HEIGHTS, Mich., Sept. 3  /PRNewswire/ -- A review of BusinessWeek Top 50 Performers in the new issue of BetterInvesting Magazine concludes that although many of the companies appear to be well-run, many are questionable investments at this time because their price is too high or because sales growth has been slowing down. The article, which relied on the association's fundamental stock evaluation tools to analyze the list, is a reminder that there's a difference between a great company and a great stock.

"Most of the best opportunities in investing occur when the market is fearful," says Adam Ritt, editor of BetterInvesting. "Stocks with high price-earnings ratios in the 30s, 40s, 50s and beyond, indicating an abundance of confidence by the market in these companies, tend to underperform."

The BusinessWeek list, published earlier this year, measures the stock performance of S&P 500 index companies over the past five years through March 2010. Besides including well-known names, such as Apple (AAPL), Google (GOOG) and McDonald's (MCD), the list has many companies much more familiar to BetterInvesting members than to the general investing public. The top performers include Express Scripts (ESRX), Gilead Sciences (GILD), Stericycle (SRCL) and Cognizant Technology (CTSH), which have been featured in BetterInvesting Magazine or have become popular holdings because members have drawn on the association's tools, resources and community to identify them as excellent candidates for investment.

"Sales growth is another important issue that emerges when using BetterInvesting's tools for analyzing stocks," Ritt says. "When sales growth slows down, gravity usually takes hold on earnings growth. Many investors focus only on earnings. Although growth in earnings per share is vital — after all, it's EPS growth that drives stock prices over the long term — it all starts with sales."

About BetterInvesting

Since 1951, BetterInvesting, the brand identity of the National Association of Investors Corporation, has helped over 5 million people become better, more informed investors. BetterInvesting, based in Madison Heights, Mich., helps its members build wealth through local, regional and national learning events as well as through Web-based tools, software, member publications and online resources. As the nation's largest nonprofit organization dedicated to investment education, it provides investing knowledge and practical investing experience through local investment clubs, local volunteer chapters, online courses and an active online community. BetterInvesting and its subsidiary, ICLUBcentral, currently serve over 120,000 investors.

For more information, go to www.betterinvesting.org.

SOURCE BetterInvesting

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