How volatile is it? How are other companies in the industry performing compared to yours? You may decide that although this stock is a winner, there are multiple other companies in the sector that provide even better potential returns. Due to the fact you may not want to place all your eggs in one basket and purchase them all, you may decide to leave this stock for an even better position.
There are multiple strategies and methods to identifying profitable growth stocks. I could write pages upon pages of strategies and factors you need to take into account. These three are a solid start, and are often the deciding factors when choosing if you would like to look further into a company.
Don’t get hung up on one or two underlying numbers being excellent. You need to look at the company as a whole to truly determine if they are worth your hard-earned money. For example, a profitable niche can be thwarted by a bad management team who doesn’t seem to know how to use allocated funds correctly.
Growth stocks tend to take time to grow. But that doesn’t mean once you purchase the stock you are in it for the long haul. If underlying numbers change and your evaluation of the company becomes one that you do not want to be a part of, don’t be afraid to sell.
Not every growth stock is a winner, in fact, not a lot of them come to fruition. That doesn’t mean that you are going to lose on the majority of positions you take in a growth stock, it just means they may not be the slam dunk you once projected.
I hope this article has helped you at least get a head start if you are interested in finding some solid growth stocks to add to your portfolio.
This article was republished with permission from Modest Money.