Value and Growth Stock: Preferred Investment Method
The first writing assignment is due at the end of Module 3. You are advised to begin working on the first writing assignment during Module 1.
This writing assignment should be in an essay format. It should use two or more published news or academic articles which are less than a year old as cited references. In your essay, you should answer the following questions:
• What are value stocks?
• What are growth stocks?
• What is the reasoning that investors use for purchasing value or growth stocks?
• Has value or growth investing worked best over the long term?
• Do you prefer one of these investment methods? Justify your response.
• Find recent examples of news articles in which someone is described as a value or growth investor. How successful have they been with this method?
The essay will be in APA format and be 500-1,000 words in length (this range includes everything in the assignment including your name, title, and citations). Turnitin.com software will be used to ensure that submitted assignments are original works. See the rubric on the next page for complete grading criteria.
Please add at least 2 sources
This writing assignment should be in an essay format. It should use two or more published news or academic articles which are less than a year old as cited references. In your essay, you should answer the following questions
Value stocks Value stocks are the companies which tend to be undervalued, but with, retained earnings and earnings per share (EPS). Additionally, they have low price to earnings ratio (PER) high dividend yield and low stock price compared to the stock book value.
Growth stocks The growth stocks refer to companies that have consistent high growth rates over time, as represented by high earnings, revenue or cash flows. The growth stocks are high returns but are also associated with greater risk compared to the value stocks. Growth stock investors identify the companies that are expanding rapidly. Purchasing value or growth stocks Investors would buy the value stock to seek out bargains for investments that are lowly priced when one considers the sales, book value and assets. Like a bargain hunter, a value stock investor looks to buy cheap and ignore the blue chip stock that are overvalued. The value stock investors identify solid companies with potential for high returns over time. One would purchase the growth stocks focusing on the long-term growth and stock appreciation. The shares that have higher growth potential are identified, as they are more likely to outperform the slow growth stocks. Such companies reinvest their earnings, and the investors’ looks at the growth potential, but since they are volatile, one needs to diversify their stock holdings.
Value or growth investing over the long term The value stocks outperform the growth stocks in the long term, as these types of stocks have ended to do better during times of economic growth. This has been the case over the past decades. On the other hand, the growth stocks have performed better when there is contraction and weak economies. ...