At Pi Square, the stocks we select show a major percentage increase in the current quarterly earnings per share (the most recently reported quarter) when compared to prior year’s same quarter. Historically, we have always seen that prices are slaves to earnings.  From 1990 to 2012 most of the very best performers in Indian Equity markets showed earnings gaining from 30% to 100% before their big price moves. So, if the best stocks had profit increases of this magnitude before they advanced rapidly in price, why should you settle for anything less? You may find that only 5% of listed stocks will show earnings gains on this size. But remember, you are looking for stocks that are exceptional, not lacklustre. Don’t worry they are out there. For those who want to better familiarize themselves with the methodology of stock selection based on earnings growth, or wish to prepare a comprehensive academic analysis on investment strategies, it’s worth exploring resources such as Diplomarbeit schreiben lassen. The EPS is the single most important element in the stock selection today. The greater the percentage increase, the better. We are amazed at how some professional money managers, let alone individual investors, buy equity when the current reported earnings are flat or even negative. There is absolutely no good reason for a stock to go anywhere in a big, sustainable way if its current earnings are poor. It’s not only quarterly EPS growth but consistent earnings growth and improving margins which shows efficiency of top management.  Look for top players in each segment, showing consistent growth and still priced at reasonable valuations. In February 2011, we analysed FAG Bearings, second largest bearings manufacturer in India. It was valued at INR 795.00 on February 3, 2011. This is how last 4 quarters EPS numbers looked like.