How to invest in growth stocks, and how to choose to invest in growth stocks?

** is the product of equity premium, if you want to hold for a long time is better to understand the equity investment, investment equity is equal to value investment, the key is to choose a good company, the future post-listing income is very considerable. Not to mention the transfer board.

Davis's Principle:1Double-click (earnings from performance growth + earnings from valuation improvement = magnitude of stock price**). 2.Double kill (loss of net profit decline + loss of valuation decline = magnitude of stock price**).

For example: I have invested in Canny elevator shares, at the end of 2012 was the bear market, when a period of time in Shanghai and Shenzhen all the first day of the trading volume of the first day was less than 80 billion, investors after a long period of bear market torture, the mood is very pessimistic, the market is very sluggish. At this time, the lowest market value of Canny Elevator was less than 2.3 billion, in order to facilitate the calculation of statistics, we took the total market value of the stock on December 31, 2012 ** 3 billion, the company's net profit in 2012 was 100 million, and the corresponding day was 16 times the price-earnings ratio.

Subsequently, the company grew rapidly in two years, and the company's net profit increased by 100 million yuan on December 31, 2014, compared with 100 million yuan in 2012. The company's total market value in 2014 was 8.2 billion, an increase in the yield of 3 billion yuan compared with the total market value in 2012. From this, we conclude that the share price yield is higher than the net profit growth, and the higher yield is due to the increase in the price-to-earnings valuation expectation caused by market sentiment.

Let's take a look at the change in the company's valuation expectations, as of December 31, 2014**, the company's total market capitalization is 8.2 billion, net profit billion, calculated corresponding to the P/E ratio is multiple, and the company's P/E valuation on December 31, 2012 is 16 times, the valuation in 2014 is significantly higher than the valuation in 2012. So Davis's double-click is the gain from net profit growth plus the gain from valuation improvement, thus equaling the final excess return! The answer comes from:

There are many investors who are entangled in value stocks and growth stocks when they choose, in fact, both stocks are value investments, and you can choose to be undervalued and have growth.

Some people will say, I don't have professional knowledge and theory, how do I choose to invest in growth stocks? In fact, this is very simple, we can analyze it from the perspective of value and growth, so that we can choose the growth stocks that are suitable for us.

1. What is value?

Value refers to the value of the listed company, if we do not know the value of the company we invest in, it is not able to support your expectations of the stock price. **There are many ways to analyze value, we just need to choose the one that is suitable for us and can accurately analyze the value of the company.

If you are an ordinary investor, you can make a rough calculation of the ** value through financial data, and the calculation method, we usually use relative valuation and absolute valuation, such as: PE, PB, discounted cash flow, etc. When we calculate the value, we should use a price lower than the value, so as to make a profit and be safe.

2. What is growth?

Growth refers to the continuous growth of the company's expected profitability, and for ordinary investors, as long as they grasp the following points, they can understand the company's growth

1. The growth of the enterprise itself is generally understood through financial data and market research. The market research mentioned here is not to conduct enterprise research like an analyst, but to make a judgment through current information and product recognition. Growth cannot be seen in a single quarter or a year, it must be sustained over a long period of time.

2. The core competitiveness of the enterprise, in order to ensure the sustainable growth of the enterprise, it must have its own core competitiveness. If the product or service is not differentiated, how to maintain high growth. Industries that are too imitative will eventually become low-profit industries.

3. The investment of R&D funds, there are independent research and development companies, we must consider the R&D investment rate, I will generally refer to the proportion of R&D funds in operating income, so that we can understand the importance of this enterprise to research and development, some companies seem to have low returns, but a large amount of funds for research and development, once the research and development is successful, the income will increase geometrically.

4. The management ability of the enterprise team, which we generally understand from the operation of the enterprise and the change of the management team, if the management team does not change frequently and has less negative news, and has been able to maintain the growth of corporate profits, the management ability of the whole team is still relatively good.

Here's how to choose:

1. First, you must choose the right industry to choose the right growth stocks, in the context of the economic cycle, you can't always choose a steel industry, this industry with serious overcapacity, I personally like some emerging industries or medical, computer and other related industries, absolutely not choose the industry that is heavily affected by the economic cycle. So the industry is the most fundamental factor.

2. Second, the share capital of listed companies is the second important reason, if you choose those large enterprises with a market value of tens of billions, this is not a growth stock, but a range of value stocks, you can not enjoy the rapid growth of the enterprise to bring you excess returns, you can only eat some dividends every year, there is no point in doing this kind of stocks, choose growth stocks, the market value is best in the listed companies below 10 billion.

3. Third, PE is the so-called price-earnings ratio can not be too high, of course, many people may say that the PE of growth stocks is relatively high, but what I want to say is that the stock price of growth companies with high PE has often overdrawn the possibility of the future, so it is best to choose a listed company with PE below 30 as the target.

4. Fourth, but also look at the company's main products and innovation capabilities, a growth company does not have a high gross profit market share of the fist products, then it is difficult to stand out in the crowd, a company is the main product or the product, the product is the soul and foundation of the company. Of course, if a company's product is too single, then once a similar product appears on the market, it can be a fatal blow to the company, so for a single product company, we must invest a lot of money every year for innovation, develop new products, or achieve horizontal development through the pace of epitaxial expansion.

5. Fifth, for fast-growing companies, there is actually another important indicator that the growth rate of net profit must be maintained at more than 20% per year, and ROE should be greater than 10%, so that companies are worthy of being called growth companies.

6. Sixth, it depends on the age of the management, generally if the average age of the management of a company is over 50 years old, to a large extent, the possibility of the company's future is inhibited.

7. Seventh, it is necessary to open the debt situation, if a growth stock company is to achieve the growth of the company's profits by constantly borrowing, although the development of this kind of growth stock company is fast, but the disadvantages of the future will be very obvious, excessive debt will make the company's future cash flow greatly limited, once the sudden time, it is dangerous.

Extended Materials. About growth stocks.

1) Growth stocks refer to listed companies that are not large in scale, but are in the process of benign development, and listed companies have good management, sustained and rapid increase in profits, and have strong competitiveness in the market.

2) Growth** is mostly common stocks, which refer to those that may not be able to obtain high dividends or other preferential conditions immediately, but have good prospects for the future**. Since the outlook depends mainly on the situation and development of the issuing company, only those companies that are rapidly increasing in sales and earnings and are growing much faster than the average growth rate of the country and their industries can be considered growth.

First, consumer companies, especially in the pharmaceutical, alcohol, home appliance chain and other industries. For example, Suning Electric, since its listing, the compound price has exceeded 1,000 yuan, and the product is more than 50 times. Since its listing, the compound price of Yunnan Baiyao has exceeded 100 times, not to mention Moutai, the market value of the first listing was only medium at best, and the current market value has exceeded many ** directly affiliated enterprises.

There are also new synthesis, Hualan Biology, Dong'e Ejiao, etc., the landlord can take a look at their chronology, pay attention to the right to reinstate.

As we all know, some of China's resources occupy an important position in the world, especially non-ferrous metals and coal, and the resources belong to the state and the whole people, but they are enjoyed by these enterprises free of charge. Except for a few companies, almost all of these two categories have become big **. Coal such as Datong, Pingmei, Open-pit Coal, Guoyang, Xishan; Non-ferrous metals such as CICC**, Hongda, Hengbang, Jean, Jiangtong, etc.

Growth stocks are companies that continue to grow in sales and profits faster than the country as a whole. These companies often have big plans, focus on research, and keep a lot of profits to reinvest to facilitate their expansion. Due to the company's strong reproduction capacity, as the company grows and develops, the amount of ** issued will also rise, and shareholders will be able to benefit from it.

You can select stocks based on the financial information in the software, such as yield, net worth, and so on.

Look at indicators such as EPS, dynamic PE, provident fund per share, net assets per share, undistributed profit per share, etc.

See if the growth rate of operating income is faster.

Whether the profit margin is high.

Your own judgment on the development of the industry.

Whether profits are growing fast and whether net assets are growing fast.

Hope it helps.

Novices want to invest, and think that growth stocks can make a lot of money, this concept is undoubtedly a wrong concept, the novice itself is not as keen as the veteran's sense of the market, and there is not much experience, at this time to invest in growing companies, this is simply to pit their own wallet. SoNovices should not invest in growth stocks, and if they really want to invest in growth stocks, they must be cautious, otherwise you will definitely be pitted and lose everything. <>

The market has always been ups and downs, and there are only a few people who can make money in the market, and it is even more difficult for novices to make their first pot of gold in the market. So don't think that you can make your first pot of gold in the ** market, this is an unrealistic idea, this idea is better less. <>

In the market, in fact, some growth companies are more risky. This kind of growing companies, because in the stage of rapid development, their performance will have great uncertainty, investing in growth stocks is actually no different from gambling, in the face of this extremely high-risk growth stock novice should be cautious

If a newbie really wants to invest in growth stocksIt is necessary to have a clear understanding of the company's performance, and be able to judge whether the industry the company is engaged in has room and possibility for growth in the future. If the performance is not good and there is little room for growth, then the newbie does not have to invest their money in growth stocks, after all, it is just a waste of such money.

Combining all of the above,Investment is risky, and you need to be cautious when entering the market! It is better to invest less in so-called growth stocks, after all, growth stocks are not as profitable as imagined. In today's ** ticket market, in fact, there are really a very small number of people who can make enough money, don't think that you can get rich overnight in the ** market, this is an unrealistic idea, it is best to abandon this unrealistic idea as soon as possible, and it is the right way to work in a down-to-earth manner.

The choice is that it has been developed for a long time, and it has always been the kind that continues to grow, and it cannot be chosen at will.

After studying his own and others' long-term investment records through Kaimo, Fisher believes that if you want to make a lot of money, you must be patient. In other words, it is often easier to see what the stock price will reach than how long it will take to reach that level. Another important thing is that the market is essentially deceiving investors, following what everyone else is doing at the time, or doing it with the irresistible cry in their hearts, which often turns out to be wrong afterwards.

Growth stocks can choose some potential development companies, and the business scope of these companies must be vigorously supported by the state, and the policy of the state must be in line with the policy.

You should choose a relatively stable production, and you should pay attention to learning the methods and skills of choosing the best, and you should also pay attention to observing the trend of growth stocks.