How to Pick Blue Chip Stocks
Many people ask, “How do you invest in future blue chip stocks”? Well, it is not
that easy, and it takes a lot of hard work. Here are a few clues that you may be able to decipher for yourself
to start you on your way to a better lifestyle.
1. Let us take a look at some of the characteristics that distinguish a growth stock from the
other general categories of stocks; those that emphasize dividend payments and those whose prices tend to rise
and fall in line with the economic cycle.
2. Future blue chip stocks are generally found in companies that offer products and services
with particularly favorable long term growth potential.
3. Management tends to be aggressive and are constantly searching for new products and eyeing
growing markets. They place a good deal of emphasis on research and new product development.
4. Pick companies that are number one in their industries, market cap $1 billion or more.
5. Invest in firms that sell low priced products. Many future blue chip companies have a market
for low priced products. It is a way of saying to their shareholders that we have something that is lower than
anybody else and we are also making a profit.
6. Favor shares that are trading at a reasonable multiple.
7. Look for companies riding the crest of the right megatrend and demographic wave.
8. A future blue chip stock will not be thinking about handing out dividends in the future. They
want to put the profits back into the company, for future growth. By reinvesting their earnings, the company hopes
to increase their profits over the years.