Most market commentators believe that the valuation of a growth stock reflects the likely future growth rate of the company. Stocks trading at above average earnings multiples are expected to grow at above average rates.
In reality, high valuations often simply reflect how much growth has already taken place. They do not say anything about the future. Moreover, as the end market becomes saturated, as can happen with...
Headed up by Penny Kyle
Ex-Standard life manager Angela Burns
Latest news and analysis
Talking Strategies: The number of companies in Asia with higher payout ratios have grown since the mid-1990s, but some investors remain wary of searching for income in Asia and Japan. In this video, Jupiter's Jason Pidcock and Dan Carter explain why this...