One of my favorite hunting grounds for finding up and coming stocks is the Forbes list of "The 200 Best Small Companies," presented in the October 31, 2005 edition of Forbes Magazine. Regarding this list, Forbes says, "A company lands here by delivering financial performance - namely, growth in sales, earnings per share and a high return on equity. But being a great company is very different from being a great investment. No corporation is so terrific that an overheated stock won't make it into a bad investment choice." So how does one distinguish between a great company and a great investment?


Use VectorVest, of course. I have found that reading about these stocks in Forbes magazine and seeing how they are analyzed and ranked by VectorVest provides me with a great way of knowing what's what. Take Hansen Natural, HANS, the number one ranked stock in Forbes' current list, for example. Would I buy this stock right now? No way. As of yesterday, it had a VectorVest rating of "H" and a VST of 1.15. With an RT of 0.88, its price is in a down trend. Moreover, it's nowhere near a top-ranked VST stock. But, it used to be when it was at a much lower price. HANS first reached a VST level above 1.40 when it was $6.27 a share on March 3, 2004. It appeared on the opening Stock Viewer screen the next day. Subsequently, it appeared numerous times as a top ranked stock in Stock Viewer. Similar examples can be shown for Forward Industries, Sun Hydraulics and Lufkin Industries.

So the simple thing to do is make a WatchList of these stocks to see what's going on. For your convenience, we have prepared such a WatchList and called it the "The Forbes 200/2005." It's located in the Special WatchList Group.

P.S. Medicis Pharmaceutical, which is on this year's Forbes 200 list, appeared in Stock Viewer as our top stock ranked by VST on January 5, 1996. It is up 1,120% since then.