Here's how to spot a good growth stock, according to one fund manager

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Growth stocks have been enjoying a rebound after a miserable 2022. But Ian Mortimer isn't too concerned about whether the market's up or down at the moment.

Growth stocks have been enjoying a rebound after a miserable 2022. And the tech sector in particular — a favorite among investors seeking exposure to growth stocks — has been a bright spot amid the banking turmoil. The tech-heavy Nasdaq Composite has gained about 5.8% since March 10, as the collapse of Silicon Valley Bank reverberated through the market. That's bigger than the 2.3% gain in the S & P 500 over the same period.

" But not all innovative or exciting companies make for good investments, he cautioned. To sieve out unsuitable companies, Mortimer applies a bottom-up analysis that leaves only those with earnings, and which do not require "significant" leverage. Mortimer said it's important to apply "valuation discipline" in evaluating potential investments. He said one of the biggest risks of growth investing is paying too much today for future growth.

Source: News Formal (newsformal.com)

 

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