Market Classifications

Shares of large, well-established companies with a long track record of stable earnings, strong balance sheets, and consistent dividend payments. Blue chip stocks are typically industry leaders with market capitalizations exceeding $10 billion (large-cap), recognized brand names, and proven management teams that have weathered multiple economic cycles.

Example: Companies like Microsoft, Johnson & Johnson, Procter & Gamble, and Coca-Cola are considered blue chi...

A stock of a company expected to grow earnings at an above-average rate compared to the market, typically reinvesting profits for expansion rather than paying dividends. Growth stocks usually have high price-to-earnings (P/E) ratios, minimal or no dividend yields, and are suitable for clients with a Growth investment objective seeking capital appreciation.

Example: A technology company with strong revenue growth but no dividend payments and a P/E ratio of 45 is cl...

A stock of a company with market capitalization exceeding $10 billion, typically representing well-established corporations with stable earnings, strong market presence, and high liquidity. Large-cap stocks are widely held by institutional and retail investors and often included in major market indices like the S&P 500.

Example: Apple, Microsoft, and JPMorgan Chase are examples of large-cap stocks with market capitalizations ex...

Equity securities of companies with market capitalizations below $300 million. These stocks carry the highest risk and potential return among market cap categories, with very limited liquidity, minimal analyst coverage, and heightened susceptibility to manipulation and fraud.

Example: A biotech startup with a market cap of $150 million trades on the OTC market with daily volume under...

A publicly traded equity security of a company with a market capitalization between $2 billion and $10 billion. Mid-cap stocks offer a balance between the growth potential of small-cap stocks and the stability of large-cap stocks, with moderate liquidity and volatility. Often considered a sweet spot for investors seeking both growth opportunities and relative stability.

Example: A technology company with a market capitalization of $5.2 billion would be classified as mid-cap. An...

Stocks trading below $5 per share, regardless of market capitalization. Typically high-risk and speculative, often trading on over-the-counter (OTC) markets rather than major exchanges. Subject to higher volatility, manipulation risk, and limited regulatory oversight and analyst coverage.

Example: A speculative biotech stock trading at $3.50 per share on the OTC Pink market qualifies as a penny s...

A stock of a publicly traded company with a market capitalization between $300 million and $2 billion. Small-cap stocks typically offer higher growth potential than large-cap stocks but come with greater volatility, lower liquidity, and higher investment risk. While small-caps can include emerging growth companies, they can also be well-established businesses operating in smaller market segments.

Example: A technology startup with a market cap of $850 million ($42.50 share price × 20 million shares outst...

Stocks trading below their intrinsic value based on fundamental analysis, typically characterized by low price-to-earnings (P/E) ratios, low price-to-book (P/B) ratios, and often steady dividend payments. Value investors seek undervalued companies with strong fundamentals that the market has temporarily overlooked or mispriced.

Example: A profitable utility company trading at a P/E ratio of 12 (while the market average is 20) and payin...