Motley Fool - Small-Cap Growth Investor

Validea used the investment strategy outlined in the book The Motley Fool Investment Guide written by Motley Fool to create our Small-Cap Growth Investor portfolio.

The Gardners specialize in searching out stocks of small, fast-growing companies with solid fundamentals, including healthy profit margins, low debt, ample cash flow, respectable R&D budgets and tight inventory controls. A key indicator of a strong stock, they believe, is an earnings growth rate that is greater than the stock's price/ earnings ratio. Wall Street calls this metric the PEG ratio (price/earnings-to-growth ratio); the Gardners call it the Fool Ratio. By either name, it's a great way to separate attractively valued growth stocks from those that are overvalued. The Motley Fool investment strategy will appeal to investors seeking solid growth companies in the small-cap sector of the market.