Growth versus Value Stocks

Firms in their infancy will typically grow at a faster pace than more established firms. As a consequence, we can expect their share price to reflect this. The share price of young firms will include shareholders future expectations for the firm. For that reason, the share price of young firms or growth stocks can represent good value if the firm realizes those expectations. We discuss how investors assess the price of growth stocks, the differences between growth and value stocks, and the different investment strategies.