Category: Money tips Release Date: 2007-05-13
Valuation of stock-picking an object must be of future performance and growth of company, but the way the performance of growing variety. If a company's performance increase is attributable entirely relying on its own core business, then we can increase the performance of such companies is called a static growth. Example, increase product sales through the price, thus boosting performance growth, which is typical of static growth. Another example is the company's market share by expanding the product so as to drive up sales culminated in the performance belong to the static growth. There are new products, and so the upgrade. No matter by what form, as long as the growth performance through the main profit growth may come from belonging to the static growth.
Static growth is one of the most common mode of growth performance can be said that the vast majority of companies are growing through the static mode of development, so it most easily seen in the study report. Static growth of two characteristics:
1, an increase in general not. Usually 30% or less, generally as long as 20% could lead to a researcher's attention.
2, the report has some lag, when we see the reaction when the shares are already there.
As the stock price performance for less than 20% growth will not have much reaction, so even 30% of the growth is not easily choose to do so just to reduce risk. In addition, as the most common investors, the same as we have seen the study is among the most common, so some good has long been the company's assertion that the context of a specific introduction of a considerable portion of foresight has been pre-intervention, stock prices has also been rise to a certain extent. Therefore, such performance is difficult to static growth, let us resolve to invest in the company, after all, after the stock price will be swallowed up the future room for growth.
If, after a series of valuation of stock-picking process is credible, but concluded that stock prices already have some gains, then we can still include it in the selected candidate species as well as watch. As the broad market decline and other reasons, if share prices fall, then as long as the price can still be a reasonable investment.
Static growth in the company of such performance is not what we want most are looking for, unless it did not find a better company, because experience tells us that someone sooner than we find these companies and thus it has attracted in front of our involvement.
(Pan Weijun)
