When starting to participate in the stock market, we all must have heard about the knowledge and concepts of stocks, especially 3 outstanding stocks Bluechip, Midcap and Penny. So what are Bluechip, Midcap and Penny stocks? What are the characteristics? In today's article, let's find out details about these 3 groups of stocks with PHS.

Large Mid Smallcap 01

Bluechip, Midcap or Penny stocks are a group of stocks classified by market capitalization, where market capitalization is understood as the value of a company calculated at market price. Bluechip, Midcap and Penny stocks are groups of stocks with market capitalization from large to small, respectively.

» What is Bluechip stock?

Bluechip stock is a stock of a company with a high reputation and strong financial position to pay dividends to investors in a transparent manner. In addition, the company must have a large market capitalization, be established and operate for many years.

Large Mid Smallcap 02

  • Features of Bluechip shares:

Advantages

 Defect
  • Attractive dividend payment policy.
  • High security due to being issued by large enterprises.
  • Stable and sustainable profit
    Suitable for long term holding.
  • Difficult to make breakthrough profits.
  • Slow growth rate.
  • Earnings are lower than some other stocks.

» What is Midcap stock?

Midcap is known as a group of stocks belonging to businesses with an average capitalization of 1,000 - 10,000 billion VND. Midcap shares belong to companies that are gradually developing and have high growth potential on the stock market. Moreover, Midcap has stronger resilience and growth potential than stocks with large capitalization like bluechips, but is more stable and safe than Penny stocks.

  • Features of Midcap stock

Advantages Defect
  • Has a stable foundation and strong growth potential.
  • Midcap stock price is mid-range and affordable for many investors.
  • High liquidity, safe.
  • This stock price volatility is not high.
  • There is a risk of price manipulation or speculation.
  • Appreciated for stability, and more security but still potential risks from the market.

» What is Penny Stock?

Penny stocks are stocks with very low par value. They are usually issued by small, newly listed companies. In other countries, Penny shares also have some names such as Nano Cap, Micro Cap Stock, and Small Cap. This type of stock is usually traded at a low price (less than 5 USD/share).

Large Mid Smallcap 03

  • Features of Penny stock

Advantages

Defect
  • Allows small companies to raise capital on the stock market.
  • Could be a way to get a company listed on a larger market.
  • Due to the low price, it is possible to bring big profits when the price increases.
  • Lack of a liquid market and few buyers.
  • There is little information about the company's financial situation.
  • There is a high probability of fraud and bankruptcy of the company.

So all the information about the concept as well as the advantages and disadvantages of each type of Bluechip, Midcap and Penny stocks have been mentioned in detail and fully by PHS to investors. Hopefully, investors will choose stocks that are suitable for their financial conditions after reading this article. Follow PHS to update more knowledge about financial investment - useful securities.