growth stock

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Growth stock

Common stock of a company that has an opportunity to invest money and earn more than the opportunity cost of capital.

Growth Stock

Share in a company performing better, or expected to perform better, than its industry or the market as a whole. Shares generating a return on equity of greater than 15% are generally classified as growth stocks, but not all growth stocks are classified as such. Such stocks usually pay little to nothing dividends as the companies reinvest most of their earnings. Some believe that many or most growth stocks are overvalued, citing for example the large number of growth stocks during the dotcom bubble.

growth stock

The stock of a firm that is expected to have above-average increases in revenues and earnings. These firms usually retain most earnings for reinvestment and therefore pay small dividends. The stock, often selling at relatively high price-earnings ratios, is subject to wide swings in price. Examples include Intel, General Electric, and Dell.
References in periodicals archive ?
Growth stock investors focus on companies expected to sustain above-average earnings increases.
Growth stock investors believe that future earnings are critical in determining a company's worth.
Middle capitalization (midcap) growth stocks are securities which fall into the Russell Midcap[R] Index.
Based in Beverly Hills, Emerging Growth Stocks, LLC (EGS) has earned a reputation as one of the premier sources for valuable investment advice and stock recommendations for individual investors, money managers, broker-dealers, and fund managers.
For further information on EGS, please contact Mark Porrello, Managing Partner of Emerging Growth Stocks at porrello@emerginggrowthstocks.
More than 70 percent of the managers surveyed predicted gains for large-cap growth stocks, up 8 percentage points from last quarter's survey and the same level of bullishness displayed in the second quarter of 2004.
As the bubble market came to an end in the late 1990s, growth stocks were all the rage as the promise of big profits and revolutionary advances in technology spawned hundreds of new companies.
Investment managers believe a new trend is emerging - one that favors domestic and foreign large-cap growth stocks at the expense of domestic small-cap stocks - and, as interest rates rise, this will hurt bonds and real-estate investments," said Randy Lert, Russell's chief portfolio strategist.
Managers became less optimistic about growth stocks in the third quarter: net bullish sentiment fell 28% for large cap, 16% for mid cap, and 18% for small cap.
Read Richard Moroney's complete commentary, and don't miss out on more low-risk growth stocks, by clicking: http://at.
Her early career experience includes a stint as vice president of investments with Evergreen Funds as well as time spent as a securities analyst specializing in emerging growth stocks.