To The Moon

Legendary investor Peter Lynch defined six stock categories you must know:

Peter Lynch on Making Money in the U.S. Stock Market | MOI ...

1. The Fast Growers

2. The Stalwarts.

3. The Slow Growers.

4. The Turnarounds.

5. The Cyclicals.

6. The Asset Plays.
   

   6 Stock Types Crucial For Your Portfolio

Among them, Fast-Growth, Turnaround, and Asset-Play are the types most likely to produce stocks that double in value. Of course, the same company's stock may belong to different types at different times.

1. Fast-Growth Company Stocks Fast-growth companies are those that are small in scale, newly established, highly growth-oriented, with an average annual growth rate of 20% to 30%. However, when the growth rate slows down, fast-growth companies are in danger. Therefore, it is necessary to look for fast-growing companies with good balance sheets and substantial profits. The trick to investing in fast-growth company stocks is to figure out when their growth period will end and how much the purchase price should be to share in the growth of fast-growth companies. $Tesla Motors(TSLA)$ $SentinelOne, Inc(S)$ $Snowflake(SNOW)$

2. Stable-Growth Company Stocks Stable-growth companies are typically also large entities, but their annual profit growth rate is between 10% and 15%. Whether investing in stable-growth company stocks can yield considerable returns entirely depends on the appropriate timing of purchase and the reasonableness of the purchase price. Generally, after buying stable-growth company stocks, if the stock price has increased by 30% to 50%, it should be sold. If you can successfully operate several stable-growth stocks in a row, the returns are also considerable. $Coca-Cola(KO)$ $Visa(V)$ $Home Depot(HD)$

3. Slow-Growth Company Stocks Slow-growth companies are usually large and long-established companies, with a growth rate slightly faster than the Gross National Product. Since profit growth is what drives the company's stock price up, what's the point of wasting time on slow-growth companies? Unless it's to obtain a stable dividend or for a slow-growth company to turn into a turnaround company. $Procter & Gamble(PG)$ $Colgate-Palmolive(CL)$

4. Cyclical Company Stocks Cyclical company stocks are not very safe, and timing is key to investing in cyclical company stocks. You must be able to detect the early signs of a company's business decline or prosperity. $Caterpillar(CAT)$ $Boeing(BA)$ $United Continental(UAL)$

5. Turnaround Company Stocks Turnaround companies are those that have been severely hit and are on the verge of bankruptcy. Companies in distress may not be able to turn around. But once they do, they can yield considerable returns. Turnarounds include the "who would have thought" type, "the problem is not as serious as we thought" type, "the bankrupt parent company contains well-managed subsidiaries" type, and "restructuring to maximize shareholder value" type. This may be more difficult to operate. $Meta Platforms, Inc.(META)$ $Peloton Interactive, Inc.(PTON)$ $Zillow(Z)$

6. Asset-Play Company Stocks Asset-play companies refer to any company that you have noticed but the Wall Street investment public has not. Hidden assets come in many forms. For example, a large amount of cash or metals, oil, newspapers, patent drugs, television stations, etc. For asset-play companies, all that is needed is patient waiting for the market to discover them. $Berkshire Hathaway(BRK.B)$ $Berkshire Hathaway(BRK.A)$ $Chevron(CVX)$ $Union Pacific(UNP)$

In fact, both Turnaround and Asset-Play are types where the stock price is relatively low compared to the asset value, and the value is undervalued.

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