Growth Stocks are shares of firms which are growing rapidly in value. These shares are typically oriented towards rapid capital appreciation, and shareholders invest in these stocks for their growth potential. In exchange for the potential growth provided, the firms usually take on higher amounts of risk. Growth stocks are often small to mid-capitalization firms.
What qualifies shares as growth stocks? Growth stocks are categorized as having substantially higher growth rates than other firms within the same industry or the general market. If the firm’s growth rate or return is higher than other firms within the industry or market, for multiple calendar years, the firm is categorized as a growth firm. The key words are multiple years. Any firm can achieve higher growth than the market for a single year. A true growth firm achieves higher growth for longer periods of time.
You typically look for sustainable increases in sales year over year, and expect earnings to be reinvested to fuel the growth. Typically, you will ignore dividends in growth equities. Dividends will be reinvested for growth not paid to investors. You should attempt to identify the sources of this growth, and check the sustainability of those sources of revenue. Growth Stocks must be able to sustain their growth after the investment to serve you properly. You do not, and should not, pick Growth Stocks based on the growth rate of their sales alone. You still check the firm’s fundamentals to determine that this growth is not being accompanied by financial recklessness. Moderate debt levels are expected, since these loans can fuel growth, but an abundance of leverage is still concerning.
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International Economic Analysis:
- Major Currency Economic Summaries
- Performance of Major Imports and Exports
- Mandates of Central Banks versus Expectations
- Performance Indexes of Major Economies
- Economically Correlated Currency Projections
- Large Funds Currency Sentiment Readings
- List of Technical Indicators to Look For
- Occasional: Foregin Exchange Technicals Markups
American Markets Analysis:
- Summaries of American Economic Structure
- Performance of Major
- Federal Reserve Mandate versus Expectations
- Performance Indexes of U.S Economy
- Economically Correlated U.S Dollar Projections
- Large Trading Fund Index Sentiment Readings
- Market Wide Earnings Versus Valuations
- Fundamental Ranking of U.S Business Sectors
- Best and Worst Future Consensus Estimates
- Occasional: Firm Fundamental Strength Report
- List of Technicals to Look for While Trading
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