What does a fast-growing stock look like?
Asked 3 years ago
How do you identify a fast-growing stock, and which stocks can you recommend?
Andia Rispah Igobwa
Tuesday, October 19, 2021
Many investors like to buy growth stocks because they expect their revenue and earnings rates to grow faster than the market average.
However, sometimes there is a high price tag on such valuations, which may not be cheap at all. This could result in steep declines if expectations aren't met after all when it comes time for an investor's share value or dividend checks from their portfolio investments (or retirement fund).
Growth stock investing often gets contrasted with value-based strategies such as low P/E ratios versus high prices based on future potential growth rather than historical performance. You can see how things might play differently depending upon your goals.
Whether you're looking more closely into company fundamentals before deciding whether investing more money makes sense currently or just looking more into what you can reasonably expect on a valuation basis and then what kind of future returns - the upside potential - could be had over time as well.
The stock market return is important since it indicates the success of an investment. The stock's price growth, which should exceed that of the rest of the market, over time (5 and 10 years)
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