White horse stocks refer to stocks that have formed a long-term upward trend and still have some room for growth.

The so-called 'white horse' companies tend to invest in companies with core competitiveness and sustained growth potential.

How do retail investors choose white horse stocks?

Stable white horse stocks:

Stable white horse stocks are usually targeted towards individual stocks. The following are relatively common methods for evaluating white horse stock indicators in the market.

1. Earnings per share. For listed companies, even if the total profit after tax is huge, the earnings per share are very small, indicating that their operating performance is not very good, so the stock price per share is generally not high.

2. Net asset value per share. Net asset value per share is a key indicator of the "gold content" of a stock, representing the company's net asset value represented by each share of stock. The larger the net asset value per share, the richer the wealth represented by each share of the company's stock.

3. Return on equity. The return on equity can be used to evaluate the efficiency of a company's use of its own capital, as well as its utilization efficiency of capital invested by shareholders.

4. Growth rate of main business revenue. The main business income emphasizes the stable operating performance and relatively low operating risks of the enterprise.

5. Net profit growth rate. The foundation of performance growth for listed companies is whether they can maintain a high profit growth rate.

6. Price to earnings ratio. The high or low price to earnings ratio represents the potential size of the future market. Generally speaking, the price to earnings ratio of stocks of high-performance listed companies is relatively low.

High allocation white horse stocks:

A generous distribution plan is a way to promote stock activity. If a listed company can combine it with a generous distribution plan while achieving excellent performance, it will be very simple to drive the stock price up. White horse stocks not only require excellent performance support, but also must have rich distribution plans to help, otherwise, the speculation of stocks will not be easily recognized by most retail investors. Some excellent white horse stocks in history have doubled their stock prices because they have not only launched outstanding performance but also introduced lucrative profit plans.

There are many types of stocks, which can be described as diverse and varied. These stocks have different names, formation, and equity. The classification methods of stocks are therefore diverse. What are the types of stocks? The types of stocks are as follows:

1、 Preferred stock

Preferred stock is symmetrical to 'common stock'. It is a stock issued by a joint-stock company that has priority over ordinary shares in distributing dividends and remaining assets. Preferred stock is also an indefinite certificate of ownership, and preferred stock shareholders generally cannot request withdrawal from the company midway (except for a few redeemable preferred stocks).

The main characteristics of preferred stocks are three:

Firstly, preferred stocks usually have a predetermined dividend yield. Due to the fixed dividend yield of preferred stocks, the dividends of preferred stocks generally do not increase or decrease according to the company's operating conditions, and generally cannot participate in the company's dividends. However, preferred stocks can receive dividends before common stocks. For the company, due to the fixed dividend, it does not affect the company's profit distribution.

Secondly, the scope of preferred stock rights is limited. Preferred shareholders generally do not have the right to vote or be elected, and do not have the right to vote on major operations of the joint-stock company. However, in certain circumstances, they may have the right to vote.

If the shareholders' meeting of the company needs to discuss claims related to preferred shares, that is, the claims of preferred shares are superior to those of ordinary shares and inferior to those of creditors, the priority of preferred shares mainly manifests in two aspects:

(1) Priority right to receive dividends. The order in which a joint-stock company distributes dividends is preferred stock first and common stock second. Regardless of how much profit a joint-stock company makes, as long as the shareholders' meeting decides to distribute dividends, preferred shares can receive dividends at a predetermined dividend rate. Even if there is a general reduction or no dividend, preferred shares should still receive dividends according to the distribution.

(2) Priority in the distribution of remaining assets. During the dissolution or bankruptcy liquidation of a joint-stock company, preferred shares have the priority right to distribute the remaining assets of the company. However, the priority distribution right of preferred shares is after creditors and before common shares. Preferred stocks only have the right to distribute remaining assets after paying off the debts of the company's creditors. Ordinary shares only participate in distribution after preferred stock claims.

There are many types of preferred stocks, and in order to meet the needs of investors who specifically want to obtain certain preferred benefits, there are various classification methods for preferred stocks. The main categories are as follows:

(1) Accumulated preferred shares and non accumulated preferred shares. Accumulated preferred stock refers to the right of preferred stock shareholders to demand the full amount of dividends paid in previous years if the company's profits are insufficient to distribute the prescribed dividends within a certain business year. For non cumulative preferred shares, although the company has the right to receive dividends based on the profits obtained in the current year, if the profits obtained by the company in that year are not sufficient to distribute dividends according to regulations, shareholders of non cumulative preferred shares cannot request the company to reissue them in future years. Generally speaking, for investors, cumulative preferred stocks have greater advantages than non cumulative preferred stocks.

(2) Participating preferred shares and non participating preferred shares. When a company's profits increase, in addition to enjoying the predetermined interest rate, preferred shares that can also participate in profit distribution together with ordinary shares are called "participating preferred shares". Preferred stocks that no longer participate in profit distribution, except for established dividends, are called "non participating preferred stocks". Generally speaking, participating in preferred stocks is more advantageous for investors than non participating preferred stocks.

(3) Convertible preferred stock and non convertible preferred stock. Convertible preferred stock refers to shares that allow preferred stockholders to convert their preferred stock into a certain amount of common stock under specific conditions. Otherwise, it is non convertible preferred stock. Convertible preferred stock is an increasingly popular type of preferred stock in recent years.

(4) Recyclable preferred shares and non recoverable preferred shares. Recyclable preferred shares refer to companies that allow the issuance of such shares to reclaim the preferred shares that have already occurred at the original price plus a certain amount of compensation. When the company believes that it can replace the preferred stock that has already occurred with stocks with lower dividends, it often exercises this right. On the contrary, it is an irretrievable preferred stock.

There are three ways to recover preferred shares:

(1) Premium method. When redeeming preferred shares, although the company does so at a predetermined price, it often causes inconvenience to investors, resulting in the company adding an additional "premium" to the face value of the preferred shares.

(2) When the company has preferred stock. Propose a portion of the funds obtained to establish a "debt repayment fund" dedicated to regularly redeeming a portion of the issued preferred shares.

(3) Conversion method. Preferred shares can be converted into common shares according to regulations. Although convertible preferred stock itself constitutes a type of preferred stock, it is often seen as a practical way of reclaiming preferred stock in the foreign investment community. However, the initiative to reclaim preferred stock lies with the investor rather than the company. For investors, doing so is very advantageous when the market price of common stock rises.