Chicago Tribune
Homing In On Stock Winners

By Marilyn Kennedy Melia

Searching far and wide for a winning stock? You might have better luck with a more limited hunt.

"I think the stock market is a game of information and he who gets it first wins," agrees J. Randall Woolridge, a finance professor at Penn State University. "Local investing is Joe-Sixpack trying to get one up on Warren Buffet. Workers in the factory know when orders are picking up and they are going to talk about it in the bar or at the bowling league."

A little due diligence to uncover such basics as how a company's price-earnings ratio compares to those of its peers in its sector, can add credence to the tips, suggests Woolridge.

"You can go to Internet sites and check out how a company compares to its peers," he says. "If it has a high P-E, it may be because there's good expected earnings growth."

Focus on digging for information, and beware of any impulse to give preference to the hometown company, he adds. "The trouble could arise when people think it's a civic duty to own the local stock," Woolridge says.

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REPORTERS & EDITORS: For more information, please contact Wyatt DuBois in the Smeal College of Business Media Relations Office at 814-863-3798 or wed112@psu.edu .

Penn State's Smeal College of Business offers highly ranked undergraduate, MBA, executive MBA, Ph.D., and executive education opportunities to more than 5,500 students at all levels. Featuring academic departments of accounting, finance, marketing, insurance and real estate, management, and supply chain and information systems, the college is also home to major research centers such as the Center for Supply Chain Research, the Institute for the Study of Business Markets, the eBusiness Research Center, the Farrell Center for Corporate Innovation and Entrepreneurship, the Center for Global Business Studies, and the Center for the Management of Technological and Organizational Change.

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