Growth Investing in Early Stage Target Companies

Growth Investing in Early Stage Target Companies

Growth Investing in Early Stage Target Companies


If you own stocks in a successful company whose earnings are projected to continue growing at an above-average rate, you own some growth stocks. And if you invest in some of them early, with all savvy participants do the growth can be spectacular.

My target list includes, Metalla Royalty & Streaming (OTCMKT:EXCFF), CVR Medical (OTCMKT:CRRVF) and Solis Tec, Inc. (OTCMKT:SLTK), 3 early stage growth companies on the move, good sectors, Key businesses and strong management

The Basics of Growth Investing Explained

Instead of yielding a high income, growth stocks tend to increase in value. There’s a lot of hyperbole around these special and often very pricey stocks, and for good reason.

They typically have impressively high P/E ratios.

In most cases, the company would prefer to reinvest retained earnings in capital projects, so it is not common for growth stocks to pay dividends.

Growth investors tend to receive returns from capital appreciation, meaning higher prices. The return makes it worthwhile, but be prepared to pay top dollar to get into the growth stocks game.

Philip Fisher, a pioneer in growth investing with over 35 years experience, wrote a book in which he spends a chapter urging readers to purchase shares of superbly managed growth companies, specifically technology companies.

The pace of change in the technology sector creates an environment ripe for disruptive innovations.

Mr. Fisher started out as a value investor like Warren Buffett.

His style evolved following lessons learned in the Y 1929 stock crash, learning the hard way that over time, a well-selected growth stock would substantially outperform a statistical bargain.

Mr. Fisher emphasized, repeatedly throughout his career, the value of long term investing.

Brand New Technology

Brand new technologies tend to be unproven, and growth companies spend a lot of money on development and ramping up production.

Super High PE Ratios

Growth stocks typically have super high PE ratios. A company has worth beyond its earnings and its important to balance intrinsic value against the money the company makes. Future potential should also be priced in.

What often happens in the Growth Story

It is inevitable that all growth stories will eventually fade as the sizzle comes off of the issue. The market is always moving. When growth comes to a halt, a more realistic per share price for the stock settles in.

There are 2 possible outcomes here, they are: the company is becomes correctly valued because it was highlly overrated in the past, or the company is currently under-valued and poised for a strong rebound in the near future.

And then there are Growth Mutual Funds

Growth mutual funds are characterized by their laser focus on capital appreciation. As with growth stocks, dividend payout is a rarity, so if that is what you are after this issues is not for you.

There is  a holding period of 5-10  years.

So, make sure your time frame allows for that.

The fund Portfolios will consist of companies with above-average growth in earnings,  that of which would be reinvested into acquisitions, expansion, research and development, etc.

Growth funds are for the risk-hungry. The potential is high but the risk can be higher higher. You must have a patient stomach when investing in this kind of issue.

Growth Investing Books

Here are some must-reads if you’re serious about getting into the growth investing game.

Benjamin Graham and the Power of Growth Stocks: Lost Growth Stock Strategies from the Father of Value Investing

Common Stocks and Uncommon Profits and Other Writings

Beating the Street

Symbol Last Trade Date Change Open High Low Volume
OTCMKT:EXCFF 0.59 10 February 2017 0.10 0.5161 0.5905 0.5073 62,500
HeffX-LTN Analysis for EXCFF: Overall Short Intermediate Long
Bullish (0.49) Bullish (0.31) Very Bullish (0.67) Bullish (0.49)
Symbol Last Trade Date Change Open High Low Volume
OTCMKT:CRRVF 0.3877 10 February 2017 0.02 0.3685 0.3881 0.3685 56,100
HeffX-LTN Analysis for CRRVF: Overall Short Intermediate Long
Bullish (0.30) Bullish (0.28) Neutral (0.12) Very Bullish (0.50)
Symbol Last Trade Date Change Open High Low Volume
OTCMKT:SLTK 1.22 10 February 2017 0.02 1.2 1.22 1.12 27,000
HeffX-LTN Analysis for SLTK: Overall Short Intermediate Long
Bullish (0.35) Very Bullish (0.59) Bullish (0.34) Neutral (0.11)

Remember, it is your money and so your responsibility.

Have a terrific week

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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