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Growth stocks are those companies expected to grow sales and earnings at a faster rate than the market average.
Growth stocks often look expensive, trading at a high P/E ratio, but such valuations could actually be cheap if the company continues to grow rapidly which will drive the share price up.
Since investors are paying a high price for a growth stock, based on expectation, if those expectations aren't realized growth stocks can see dramatic declines.
why would you think Mrdiy is not a growth stock? Their earnings cagr is definitely above the roof, even with covid around. It has high PE but it gets reduces after they release their quarterly results. Before was 6X.X, now it's 54.2. They have no serious competition in the home diy segment which is expected to grow at 10.3% annuanly cagr. They have mr dollar and Mr toys increasing their total addressable market further. How is not a growth stock?
and the beauty of mrdiy is, they have a decent dividend payout and is stable like nestle or ql. Covid/mco doesn't affect the business much. Which is why it's a stable + growth stock. Investors tahu.
MrDiy no competition? Pardon me? This is not tech stock, for a hardware shop going for 6X PE? I don’t know abt you guys, but is a no no for me. Disclaimer, no buy call or sell call. Just my personal opinion
Woodpecker, mrdiy is way ahead of their competitors in the affordable home improvement sector. The economies of scale will only push them further ahead. Common FPE for this segment is 30-40 but mrdiy earnings cagr is almost triple of industry average. 22.4% vs 8.9%. Btw, they still have mrdollar (f&b mainly) & mrtoy(toy) which are completely different segments. These two will be the future growth factor. Btw, not all tech stocks deserve PE6X and not all other retailing business deserve a low PE.
