How does Cabot pick growth stocks?
Cabot’s growth stock selection system starts by focusing on stocks that are strong, going up faster than the general market. These stocks are said to have positive momentum. But we need to see more than that. Behind each stock we want to see a great growth company. In most cases we require a company to be demonstrating strong growth of both sales and earnings. And we want to find a story that convinces us this great earnings growth is likely to continue in the years ahead. How does Cabot determine that a stock is strong? We look for stocks with strong relative performance (RP), sometimes called relative strength. These are stocks performing better than the general market over the long-term.
