Jim Oberweis, Jr.

At Oberweis, we’ve made our mark by targeting and investing in extraordinarily rapidly growing companies – those that are increasing revenues and earnings by at least 30% annually.

Inspired and directed by Jim Oberweis, The Oberweis Report pinpoints small companies in the very early stages of growth before they become household names – or are even noticed on Wall Street.

Companies that typically fit three fundamental criteria: at least 30% revenue growth, at least 30% earnings growth, and a price earnings ratio less than half the company’s growth rate.


We specialize in finding profitable, rapidly growing companies. To identify and invest in these companies, we apply a set of eight investment criteria that together make up what we call the Oberweis Octagon.

The Oberweis Octagon allows us to discern those companies that are experiencing superior growth, and have the potential to continue to do so.

It also helps us to buy these companies at reasonably attractive prices — valuations that don’t yet fully reflect their earnings potential. This Octagon strategy, in short, combines the best features of both the growth and value investment styles.

By helping us to avoid overpaying for stocks, while still allowing us to purchase stocks with solid growth potential, this approach can help to manage the volatility associated with investing in small-capitalization stocks.

We use eight factors when researching stocks

Here’s a closer look at how we apply these guidelines when selecting stocks:

Rapid Revenue Growth - We focus on small companies that have been able to consistently improve their revenues by 30% or more per year.  We prefer to see companies generate this growth through their own operations, rather than by acquiring other businesses.

Rapid Earnings Growth - In a healthy company, improving revenues should lead to profit growth. As a result, we emphasize companies that can post similar levels of growth in their pre-tax income and earnings per share. This means that a company must have earnings growth of at least 30% to be a candidate for our small-cap portfolios.

Low Stock Price Relative to Earnings - Generally, we look for companies whose price/earnings ratio (the stock’s share price divided by the company’s earnings per share) is less than half the company’s growth rate, based on its current stock price and next year’s estimated earnings.

Innovative Products or Services - We’re not looking for one-hit wonders. We focus on companies with products or services that offer the opportunity for substantial, enduring growth. Ideally, we look for high barriers to entry for potential competitors.

Accelerating Profitability - Companies that are beginning to grow their earnings more quickly are especially desirable to us. Their stocks can rise significantly, as investors are willing to pay more for faster rates of growth.

Low Price/Sales Ratios - We consider a company’s stock price relative to its annual sales (its price/sales ratio). If this figure compares favorably with others within the same industry, the stock is an investment candidate.

Scrutinize the Balance Sheets - We carefully review a company’s financial statements, paying particular attention to footnotes. Our goal is to identify unusual items that may indicate future trouble.

Believe the Tape - We look for undiscovered stocks, but don’t try to fight the market. We typically buy stocks that have outperformed at least 75% of their peers in the market over the preceding year.

In international markets, the Oberweis Octagon is sometimes adjusted to meet the unique characteristics of the local economies and stock markets in which we are conducting our research. While such adjustments may be necessary, the philosophical spirit of the Oberweis Octagon remains intact in the stocks we select abroad.