The Two Categories Of Safety Stocks Are The First Choice.

What is safety stocks? 1. is the growth rate of performance over expected stocks (including technology innovation stocks).

2., after the crash, the stock price has fallen to the low value to earnings ratio share in the value zone.

The first class stocks are mainly concentrated in the sub group of small and medium sized stocks (002 and 300 prefix). Their main characteristics are the sustained and rapid growth of the company's performance and the conditions for the implementation of the high dividend pfer rate (or continued high dividend). That is, the growth of the listed companies must be faster than the expansion of the capital stock. These stocks will often become the cash chasing of the market, and their share price will show high dividends and dividends, namely, "rights elimination > fill up rights > > implementation of high delivery, > re fill rights.

The second type stocks are mainly concentrated in some leading industries with outstanding performance. Their main characteristics are: the performance of the company is cyclical, mainly in the industry prosperity cycle, the national industrial policy and the pace of national economic development. These stocks are mainly concentrated in: resources (colored, coal, mineral) shares, and financial (banking, insurance, brokerage) stocks and other groups.

Does the stock have investor value? First, it is reflected in the company's performance growth level; two, whether the industry belongs to prosperity; the three is whether the company's leading products have profit margins, whether they have competitive or dominant position in the market, and the four is whether the management team is healthy or not.