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The Motley Fool | Small-Cap Growth Investor
Brothers David and Tom Gardner often wear funny hats in public appearances, but they're hardly
fools—at least not the kind whose advice you should readily dismiss.
Founders of the popular Motley Fool site on the Web, the Gardners
specialize in searching out stocks of small, fast-growing companies with solid fundamentals, including healthy profit margins, little debt,
ample cash flow, respectable R&D budgets and tight inventory controls. A key indicator of a strong stock, they believe, is one for which the
company's earnings growth rate is greater than its price-to-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.
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