Blue Chip Stocks

The term blue chip stock has become plural in the capital market. However, in everyday activities are still often found in the false understanding that the shares of blue chip stocks is identical to the expensive. Even a small portion of investors still think that blue chip stocks quality assurance: where damages would not be bought. Is that true? really blue chip stocks are always giving profits (capital gains). What is characteristic of blue chip stocks?

Blue chip stocks are always a favorite merchandise at the stock exchange. He is like the merchandise with excellent quality, so many people liked. That's why blue chip stocks are always easy because the market was thrown into great demand.
Blue chips stocks are not high-priced stocks Rp4.000, Rp5.000 or above. This is important to understand because there has been an impression as if the shares are expensive is the main characteristic of blue chips stocks. Not always the expensive shares in blue chips stocks category. There are many examples for that.

As an illustration, for example, ABC stock trading at PT Rp4.000. On the other hand, the performance of PT ABC from year to year only able to produce earnings per share (earnings per share - EPS) approximately Rp40 per share. That means if calculated, price earnings ratio of PT 4000/40 which ABC is to reach 100 times. With a PER of 100 times, then the stock price could Rp4.000 considered too expensive and not reasonable. This stock certainly does not include shares of blue chips category.

Another picture like this. PT XYZ Company, a manufacturer of beverage packaging always scored big net profit every year. Net profit growth was also high enough so that every year is always distribute dividends in amounts large enough. A high EPS and P / E were small. But on the other hand the number of shares outstanding in a very small community so there is almost no daily transactions in the stock exchange. Investors or investors who hold shares of PT XYZ tend to hold and do not want to sell on the grounds each year receives a decent dividend. Well, despite the performance of PT XYZ brilliant and stock prices in the market is high but he could not be included in the category of blue chips stocks. The reason, there is no liquidity in the market. If anything, very little liquidity.

From the above illustration that seemed very high stock price, not necessarily enter into the category of blue chips stocks. But in general, stocks are blue chips often have a high price. This is understandable considering that interested parties have enough.
So how did the characteristics of a stock into blue chips category? Most blue chip stocks have the following characteristics: a healthy financial performance, which means that in normal economic conditions and stable always recorded net income growth from year to year, distributing dividends to shareholders, the number of shares outstanding in the community (floating share) that high liquidity in the market shares are also higher, trading at a reasonable price, or the movement of stock price fluctuations in the market place naturally, not jumping up and managed in a professional management (rather than family management). Such characteristics that make market participants always chasing stocks blue chips.

However, it must be understood that the market called the market nonetheless. Rates are always changing according to supply and demand. Although the blue chip stocks, but the price can rise and can also come down, depending on the market situation at that time. If you make daily transactions (daily trading) does not mean blue chip stocks are always providing capital gains. But if you have an investment horizon is long enough, blue chip stocks is usually always gives the gain to its owner. (Tim BEI)