FACULTY OF BUSINESS AND MANAGEMENT

DIPLOMA IN INVESTMENT ANALYSIS (BA114)

JBA1144A

VALUATION AND AVALYSIS OF EQUITIES

FIN327

INDIVIDUAL ASSIGNMENT

SEMESTER OCTOBER 2021 – FEBRUARY 2022

PREPARED FOR:

PUAN RUZIAH BINTI A. LATIF

PREPARED BY:

LIYA HARISHA BINTI SAIDON HADZRI

(2020964773)

SUBMISSION DATE: 4 DECEMBER 2021

7 TYPES OF COMMON STOCK

COMMON STOCK

Common stock is a security that represents ownership in a corporation. Holders of common

stock elect the board of directors and vote on corporate policies. This form of equity
ownership typically yields higher rates of return long term. However, in the event of
liquidation, common shareholders have rights to a company’s assets only after bondholders,
preferred shareholders, and other debtholders are paid in full. Common stock is reported in
the stockholder’s equity section of a company’s balance sheet.

TYPES OF COMMON STOCK

TYPES OF COMMON DEFINITION

STOCK
GROWTH STOCK A growth stock is any share in a company that is anticipated to
grow at a rate significantly above the average growth for the
market.
Example: Growth companies tend to have unique product lines.
They may hold patents or gave access to technologies that put
them ahead of others in their industry
TECHNOLOGY The technology sector is the category of stocks relating to the
STOCKS research, development, or distribution of technologically based
goods and services. This sector contains businesses revolving
the manufacturing of electronics, creation of software, computers,
or products and services relating to information technology
Example:
Hardware breaks into wearables, peripherals, laptops, desktop
and so on. People may argue that it doesn’t make sense to call a
cloud computing company a software company, but the arbitrary
separations are a bit more manageable that the massive label of
“tech sector’’ for every company.
SPECULATIVE A speculative stock that a trader uses of speculate. The
STOCK fundamentals of the stock do not show an apparent strength or
sustainable business model, leading it to be viewed as very risky
and trade at a comparatively low price. A trader who invest
primarily in risky stocks is known as a speculator.
CYCLICAL STOCK A cyclical stock is a stock that’s price is affected by
macroeconomic or systematic changes in the overall company.
Cyclical stocks are know for following the cycles of an economy
through expansion, peak, recession and recovery.
Example:
Cyclical stocks are often further delineated by durables,
nondurables, and services. Durable goods companies are
involved in the manufacture of distribution of physical goods that
have an expected life span of more than three years.
MID-CAP STOCKS Mid-cap or mid capitalization is the term that is used to designate
companies with a market cap or market value between $2 and
$10 billion. As the name implies, a mid-cap company falls in the
middle between large cap and small cap companies
Example:
If company A has $10 billion shares outstanding at a price of $1,
it has a market capitalization of $10 billion. If company B has $1
billion shares outstanding at a price of $5, company B has market
capitalization of $5 billion. Eventhough company A has a lower
stock price, it has higher market capitalization than company B
DEFENSIVE STOCK A defensive stock is a stock that provides consistent dividends
and stable earnings regardless of the state of the overall stock
market. There is a constant demand for their products, so
defensive stocks tend to be more stable during the various
phases of the business cycle.
Example:
Utilities, consumer staples, healthcare stocks and apartment real
estate
SMALL-CAP A small cap is a public company whose total market value, or
market capitalization, is about $300 million to $2 billion. The
precise figures vary. Small cap investors generally are looking for
up and coming companies that are growing fast. That is, they are
looking for the large caps of the future
REFERENCES

https://www.investopedia.com/terms/c/commonstock.asp

https://www.investopedia.com/terms/g/growthstock.asp

https://www.investopedia.com/terms/g/growthstock.asp

https://www.investopedia.com/terms/s/speculativestock.asp

https://www.investopedia.com/terms/c/cyclicalstock.asp

https://www.investopedia.com/terms/m/midcapstock.asp

https://www.investopedia.com/terms/d/defensivestock.asp

https://www.investopedia.com/terms/s/small-cap.asp