Discount is not Always the Answer Diversification and Risk

Distinguishing Between Growth and Value Stocks

People often put stocks or their stock buying theory into the "growth" or "Value" category. This phenomenon is relatively new - pioneered primarily by investment research firm Morningstar. Most people don't care what it's called, as long as it makes them money. The basic premise is this - for value investors they concentrate on stocks whose value, in their opinion, have a discount to the intrinsic value to the company. The growth school premise is this - a company's sales and earnings potential are the best indicators of future performance.