What Is The Difference Between Growth And Value Stocks?

The main difference between growth and value stock is that, in the case of the first one, they are shares that have the potential to grow. On the other hand, value stock are shares that are under priced due to a series of factors.

Some characteristics with which a value stock can identified are: the price of the share is the same as the one that appears on the book (or less), the assets are surpass by twice by the liabilities of the company, the price to earning growth ratio is less than one (this is one of the strongest indicators), there is as much equity as debt and, finally, the price per earnings ratio is in the lowest 10% of the rated companies.