However, Avangardco (AVGR: LI) is a classic example (rightly, or wrongly) of a particularly reviled & neglected company — while I clearly think it's
a cheap high growth stock, it's probably a good idea to limit such holdings unless you're prepared to absorb significant pain & losses (ideally, on an interim basis!).
Not exact matches
His deep - value philosophy can be boiled down to four points: he's looking for
high - quality
stocks that protect against the downside; he wants businesses where short - term issues have caused investors to abandon the company; he wants to wait until valuations are «out - of - this - world»
cheap, and he tries not to pay attention to macro issues like eurozone debt or Chinese
growth.
With a track record of
high profitability, significant
growth opportunities, and a
cheap valuation, this
stock could offer significant upside for investors.
The
stock has dropped over 50 % in the past eight months, and even if the firm's
growth slows dramatically and margins shrink, the
stock's
cheap valuation makes it a safe
stock with
high potential upside.
For the purposes of this article, we wanted to highlight companies that had a significant recent track record of
growth in addition to their
high profitability and
cheap valuations, which is why the three
stocks featured all have five consecutive years of NOPAT
growth.
I'd put 75 % of assets into
higher growth buy - and - hold - forever
stocks like Brown Forman, Colgate - Palmolive, Hershey, and Nike, and then the remaining 25 % into Fisherified value
stocks like DineEquity during the 2010 through 2015 stretch when it was
cheap at the beginning of the period while simultaneously increasing its intrinsic value due to the receipt of significant one - time franchise fees.
Now what: Abiomed's ability to leverage volume
growth into
higher profit - friendly margins is intriguing, but the
stock is far from
cheap.
Because of their
high prices and low yields,
growth stocks tend to have less downside protection and more volatility than
cheaper companies.
Despite
high growth, financial strength, and a strong R&D program, Celgene
stock is
cheap.
The extreme valuation premiums afforded to defensive,
high - quality and
high -
growth stocks means that their inverse corollaries — cyclically geared value
stocks — are historically
cheap and under - owned.
I'd put 75 % of assets into
higher growth buy - and - hold - forever
stocks like Brown Forman, Colgate - Palmolive, Hershey, and Nike, and then the remaining 25 % into Fisherified value
stocks like DineEquity during the 2010 through 2015 stretch when it was
cheap at the beginning of the period while simultaneously increasing its intrinsic value due to the receipt of significant one - time franchise fees.
The extreme valuation premiums afforded to defensive,
high - quality and
high -
growth stocks means that their inverse corollaries — cyclically geared value
stocks — are historically
cheap and under - owned.
Earlier this week I was able to take advantage of the selloff and pick up two
high quality dividend
growth stocks on the
cheap: Phillip Morris International (PM) and Time Warner (TWX).
While finding young
growth stocks, or established
growth stocks suffering a short - term problem / reversal, is maybe a
cheaper &
higher potential strategy, it's also a lot more difficult to execute than it seems like with case studies & a bit of hindsight.
But my main objection comes from a
stock picking perspective & is perhaps better served with an example: Let us presume you find two VERY SIMILAR &
CHEAP high quality /
growth stocks (regardless of market cap) in two different markets — one growing at 2 % real GDP, and the other at 7 % real GDP — which
stock would you buy?!
The hard assets &
cheap metrics of your typical value
stock offer the siren song of safety, whereas investing in
high quality /
growth stocks may require a far more demanding leap of faith.
And opportunities are often found in the most mundane of
stocks & sectors — by definition, activist investing doesn't need to focus on what the market currently thinks is dirt
cheap, or
high growth.
This performance, and the performance of cyclical
stocks during these months, fits with much of the research which shows that during periods of optimism and
high expectations
cheaper stocks perform better than
growth companies.
Capital was plentiful and
cheap, property values and investment returns were
high, and rising corporate
growth was being rewarded by the
stock market.