whats the difference between value stocks and growth stocks?

Answer 1

the cap that it has

Answer 2

There may be some overlap, but when you are looking to invest in a growth stock you are looking for companies who may not be established as well and you would be looking at positive forward looking estimates from analysts to indicate this company had what appeared to be a bright future. Whether they be increases in estimated sales, eps, or cash flow.

Metrics that would be more appropriate for value stocks would be the price/book value ratio, price to earnings ratio, p/cf, and dividend yields. These would be more established companies which appear to be neglected and undervalued by the current market.

Answer 3

The primary measures used to define growth and value stocks are the price-to-earnings ratio (the price of a stock divided by the current year’s earnings per share) and the price-to-book ratio (share price divided by book value per share). Growth stocks usually have high price-to-earnings and price-to-book ratios, which means that these stocks are relatively high-priced in comparison with the companies’ net asset values. In contrast, value stocks have relatively low price-to-earnings and price-to-book ratios.

Answer 4

Valuation. Value stocks are ones that are undervalued relative to their historical or current earnings, cash flows, or book value. Growth stocks are ones that are undervalued relative to their growth potential.