Speculative stock vs Growth Stock

deepakkrkanodia
Finance Junkie
Posts: 49
Joined: Thu Aug 09, 2012 4:45 pm

Speculative stock vs Growth Stock

Postby deepakkrkanodia » Thu Nov 29, 2012 1:38 pm

As stated in answer to one of your questions related to speculative stock:

"A speculative stock is substantially overvalued and sells at an extremely high P/E ratio, just like intrinsic value of stock which came out to at 44 and market price is 50 and stock P/E is 30 versus industry average of 20"

Query:

Now whats the actual difference between speculative stock and growth stock.
Growth stocks also trade at higher multiples and have high premium.
so how can we say that above stock is speculative stock and not growth stocks?

Tags:

pankaj
Finance Junkie
Posts: 61
Joined: Fri Aug 03, 2012 11:24 am

Re: Speculative stock vs Growth Stock

Postby pankaj » Thu Nov 29, 2012 6:10 pm

Growth Stock:
A growth stock is a stock that earns a higher rate of return over stocks with a similar risk profile.
Remember, a company could be a growth company, but its stock could be a value stock if it is trading below its peers of similar risk.

Speculative Stock
A speculative stock is a stock that has potential for a large return, as well as for considerable losses. An example could be stock found in the tech bubble, where investors put money into speculative stocks, where investor could have been hurt financially or made large gains depending on the stock they invested in.

Hope this helps!

deepakkrkanodia
Finance Junkie
Posts: 49
Joined: Thu Aug 09, 2012 4:45 pm

Re: Speculative stock vs Growth Stock

Postby deepakkrkanodia » Fri Nov 30, 2012 11:06 pm

pankaj

thx

regards


deepak


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