I didn't want to overlap stock reports so I am tentatively planning to do my stock report on Circuit City. It is one of the 11 companies listed in from Good to Great: Why some companies make the Leand and Others Don't. Anyway the book explores what common concepts exist among companies that make the transition, which could be useful information for determining quality companies. These 11 companies made the leap from good to great and then sustained those results for at least 15 years. How great was great? The good-to-great companies averaged cumulative stock returns 6.9 times the general market in the 15 years after their transition points. Therefore I thought it was a good place to start when looking for a growth stock. However it will be interesting to see how the results match up with the stock selection guide and NAIC guidelines especially since circuit city is now liquidating 1/5th of its stores (155). I know that sounds like they are going under but maybe they have the management that knows that they need to make so big changes to survive and right the ship. I would like to contrast this to Best Buy, which I read an article in the Wall Street Journal about how they created an internal stock market to guage the success of certain strategies and products. If you thinks its a waste of time let me know.
Its also interesting that Fannie Mae was on of the good to great companies but so is Wells Fargo which after purchasing Wachovia is one of the nations three largest banks.
11 Good to Great Companies.
Abbott Laboratories, Circuit City, Fannie Mae, Gillette Co., Kimberly-Clark Corp., the Kroger Co., Nucor Corp., Philip Morris Cos. Inc., Pitney Bowes Inc., Walgreens, and Wells Fargo.