Category: Money Tips Date: 2006-07-12
We analyzed the performance of the company growth in two ways, one is the main industry is growing by the existing (static growth), a performance by the new project growth (dynamic growth), this new project is not the original core business, but another new business, this growth pattern is characterized by its own main business is still. If the substantial reduction in the original core business, or simply exit the body, the company's performance after growth is totally dependent on new business, this growth mode can be called the jump in performance.
Jump-growth companies to judge the performance there are several key points:
1, a very low correlation between the old and the new business or even nothing to do, before and after the performance there is no variability.
2, new business revenue is much higher than the old business.
3, the company has a reasonable business justification for the conversions.
For example a company the brink of consecutive losses of the dilemma, which were subsequently replaced as new other assets, as long as the assets of new entrants to form a good level of profitability of the performance leap the growth of this type tend to occur in ST companies.
As companies around the Panruoliangren, so long as the company's future performance are growing by leaps and bounds, we can buy in the previous equivalent to hold the future of another company, you can smoothly get two targeting a different company the difference between the proceeds.
Leap-forward development of such companies generally lasted for a shorter, no more than two years, mostly in a year, while the share price rises are often up to several times. The growth of a static no matter how the company is difficult in such a short period of time to achieve such a speed, so these companies should be more willing to take some risks that we invest in the key concern of friends, it is possible to enable us to relatively a short period of time to obtain greater benefits.
As these companies generally have the ST's experience, so before the stock are low, relatively greater rate of increase in the future. Another important reason is that some large institutional investors such as fund type ST rarely buy stocks, even though they have also been a researcher to understand. In this way, the rise in stock prices will be relatively slow pace to allow us sufficient time to analyze and judge.
Another point to remember: When the jump in after the completion of the company's performance likely will not increase.
