Many people believe they have Blue Chip stocks in their portfolio. However, there is no set definition of what constitutes a Blue Chip stock, often the term just means a big company that is a household name. But if we don’t know what makes a Blue Chip stock, how can we know when it is a value buy or when it is time to sell?

This is where Purple Chips come in.

Purple Chips are the best of the Blue Chip stocks. We analyze over 7500 listed companies on North American stock exchanges to find the very best of them. Here’s what makes Purple Chips stocks more attractive than Blue Chips:

1. Minimum of Seven Years of Positive and Growing EPS
Purple Chip stocks have at least 7 years of consistent and growing earnings. We use 7 years because that is enough time to demonstrate how a company dealt with challenges faced by their business.

2. Smooth and Predictable Growth in EPS
Earnings are the primary driver of stock prices. Smooth earnings are a hallmark of good operators. There are few nasty surprises with these companies. Although there may be day-to-day fluctuations in stock prices, over the long term increasing earnings translate into increasing stock prices.

3. Minimum Market Capitalization of $1 Billion
Size matters, bigger means more predictable. Purple Chips only considers companies with capitalization of $1 Billion.

By analyzing the EPS and stock price data of companies that qualify as Purple Chips, we determine a low and high valuation, which are constantly reevaluated (we make about 1200 adjustments per year). The Purple Chips system tells us when to buy and when to sell. Purple Chips takes the emotion out of investing.

To get your portfolio on track, become a member of Purple Chips and access the list of these great companies, see their low and high valuations, receive alerts as companies move towards their high and low and receive a weekly video update from Purple Chips guru, John Schwinghamer.

Join Purple Chips 

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  1. This is based on the theory that a market with just narrow leadership is likely to reverse. This was seen in 2000 when just a few stocks were moving higher. These stocks carried a great deal of weight in the indexes and pushed the indexes up. Breadth warned of a problem and the bear market was a problem.

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