Is there anyone could tell me the difference between the value-style and growth-style?Thank you!?

Answer 1

The above answers are good for value investing, but a bit off the mark on growth investing.

Growth stocks are in companies that are growing fast. This is not the same thing as a stock whose price is going up fast. These companies can be small start-ups or large older companies. Example: I own a mutual fund in large-cap growth stocks.

You need to look for companies with rapid revenue growth and if they are older (more than a few years) they should have rapid earnings growth. If they are younger and have no earnings then you are taking big risks.

If they are older with real earnings, then you should calculate the PEG ratio, or the Lynch PEG ratio. The PEG ratio is the P/E ratio divided by the annual earnings growth rate in percent. Lower is better and should be less than 1.0 in most cases.

This number can be found on the Yahoo Finance stock Summary page near the bottom right. However, I don't like their PEG number much because it is based on forward projected earnings, i.e. a guess. You can calculate it yourself with the Key Statistics page using past earnings instead.

The Peter Lynch PEG ratio is the same as a regular PEG ratio except that the stock's annual dividend yield (in percent) is added to the annual earnings growth rate. For young companies there is no dividend, so it doesn't matter. But for older companies it can matter a lot.

The terminology value vs growth is a little weird because you always want to buy at a good value. The above exercise describes how to buy a high growth or high P/E stock at a good value.

Answer 2

Value style: buying stocks which are significantly underpriced to their underlying enterprise value (having a low P/E, for example) and the investor must be patient for the share price to rise. The gains can come from share price increase and/or dividend payouts. Warren Buffet is the classic value investor.

Growth style: stocks which are growing at or above market or industry averages, and have an equal or higher P/E ratio than market - basically you are buying stocks which are market favorites. Growth stocks also pay little or no dividends, so the capital gains come from share price growth - not income.

Answer 3

Value investing is the ability to purchase undervalued stocks relative to its intrinsic value. This can be derived by accurately forecasting the cash flows of the stock and discounting it to the present value. This is most appropriate if the company is a mature one. If the current market price is extremely lower (50% and more) than the intrinsic value, then you are value-investing.

Growth investing is betting on the growth prosepcts of a start-up company, hoping that most of the value of the company is in the future. The company may not be earning now, but you are hoping that it will earn a compounded annual growth rate of 25% to 50% for the next decade. This is mostly done for technology stocks.

Answer 4

Penny stocks are loosely categorized companies with share prices of below $5 and with market caps of under $200 million. They are sometimes referred to as "the slot machines of the equity market" because of the money involved. There may be a good place for penny stocks in the portfolio of an experienced, advanced investor, however, if you follow this guide you will learn the most efficient strategies https://tr.im/c8109

Answer 5

In Value you look for stocks with low multiples(ie p/e,p/s,p/bv,p/eg, etc)While in growth you ASSUME the multiples will drop due to growth so pay less attention to them,and concentrate on fast growth(which will have higher multiples)