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Type of Stocks
a) Growth Stocks: Growth Stocks are always traded at high price to earning (P/E ratio). Generally these are traded at P/E ratio greater than 30.
b) Undervalued Stocks: Undervalued stocks are always traded below their bookvalue and price to earning ratio less than 5 to 10.
c) Overvalued Stocks: Overvalued stocks are those which always traded at high P/E ratio than their peers.
d) Momentum Stocks: Momentum stocks are those which are highly volatile. These are high beta stocks.
e) Defensive Stocks: Defensive stocks are low risk stocks and hence the return on them are relatively steady but low. They suit investors with a low risk profile.
