Five Categories Of Stocks

1. Classification by shareholders' rights
　　 
1. Preferred stock
　　 
Preferred stock is the symmetry of "common stock".
　　 
It refers to the shares issued by a joint-stock company that have priority over ordinary shares when distributing dividends and residual property. Preferred stock is also a kind of right certificate with no time limit. Generally, preferred shareholders cannot ask the company to withdraw their shares halfway (except for a few redeemable preferred shares).
　　 
There are three main characteristics of preferred shares: first, preferred shares usually specify dividend yield in advance. Since the dividend rate of preferred shares is fixed in advance, the dividend of preferred shares will not generally increase or decrease according to the company's operating conditions, and generally cannot participate in the company's dividend distribution. However, preferred shares can receive dividends before ordinary shares. For companies, because of the fixed dividend, it does not affect the company's profit distribution. Second, the rights of preferred shares are limited. Preferred shareholders generally do not have the right to vote and stand for election, and do not have the right to vote on the major operations of the joint-stock company, but in some cases can enjoy the right to vote.
　　 
If the shareholders' meeting of the company needs to discuss the claim rights related to preferred shares, that is, the claim rights of preferred shares are prior to ordinary shares and inferior to creditors, the priority rights of preferred shares are mainly manifested in two aspects:

(1) Dividends receive priority. The dividend distribution order of a joint-stock company is preferred stock first and common stock second. No matter how much profit a joint stock company makes, as long as the general meeting of shareholders decides to distribute dividends, the preferred shares can receive dividends according to the dividend rate determined in advance. Even if the dividend is generally reduced or there is no dividend, the preferred shares should also distribute dividends as a result.
　　 
(2) Priority of residual assets allocation. When a joint-stock company is dissolved or liquidated, the preferred shares have the priority of distribution of the remaining assets of the company. However, the priority of distribution of preferred shares is after creditors and before ordinary shares. Only after paying off the debts of the creditors of the company, when there are residual assets, the preferred shares have the right to distribute the residual assets. The common stock will participate in the distribution only after the preferred stock is claimed.
　　 
There are many types of preferred shares. In order to meet the needs of some investors who want to obtain certain preferred benefits, there are various types of preferred shares. The main categories are as follows:
　　 
(1) Cumulative Preferred Shares and Non cumulative Preferred Shares. Cumulative preferred stock means that in a certain business year, if the company's profits are not enough to distribute the specified dividends, the shareholders of preferred stock in the future have the right to demand the full amount of dividends paid in previous years. For non cumulative preferred shares, although the company has the priority over ordinary shares to obtain dividend distribution rights for the profits obtained in the current year, if the profits obtained by the company in that year are not enough to be distributed according to the specified dividend, the shareholders of non cumulative preferred shares cannot require the company to issue a replacement in subsequent years. Generally speaking, cumulative preferred shares have more advantages than non cumulative preferred shares for investors.
　　 
(2) Participating preferred shares and non participating preferred shares. When the profit of an enterprise increases, in addition to enjoying the interest at a fixed rate, the preferred shares that can participate in profit distribution together with ordinary shares are called "participating preferred shares". In addition to the fixed dividends, the preferred shares that no longer participate in profit distribution are called "non participating preferred shares". Generally speaking, participating preferred shares are more beneficial to investors than non participating preferred shares.
　　 
(3) Convertible preferred shares and non convertible preferred shares. Convertible preferred stock means that the holder of preferred stock is allowed to convert eugenic stock into a certain amount of common stock under certain conditions. Otherwise, they are non convertible preferred shares. Convertible preferred stock is an increasingly popular preferred stock in recent years.
　　 
(4) Callable preferred shares and non callable preferred shares. Recoverable preferred shares refer to the company that is allowed to issue such shares, and withdraw the occurred preferred shares at the original price plus a certain amount of compensation. This right is often exercised when the company believes that it can replace the preferred shares that have occurred with stocks with lower dividends. On the contrary, it is non recoverable preferred stock.
　　 
There are three ways to withdraw preferred shares:
　　 
<1> Premium method. Although the company redeems the preferred shares at a predetermined price, it often brings inconvenience to investors, so the company often adds a "premium" to the par value of the preferred shares.
　　 
<2> When preferred shares occur, the company raises a part of the money from the funds obtained to create a "sinking fund", which is used to redeem a part of the issued preferred shares on a regular basis.
　　 
<3> Conversion mode. That is, preferred shares can be converted into ordinary shares as required. Although convertible preferred stock itself constitutes a kind of preferred stock, in the foreign investment community, it is also often seen as a practical way to withdraw preferred stock, but the initiative of such withdrawal is in the investors rather than in the company. For investors, it is very beneficial to do so when the market price of common stock rises.
　　 
2. Common stock
　　 
Common stock is the symmetry of "preferred stock". It is a kind of stock that changes with the change of enterprise profits. It is the most common and basic stock in the company's capital composition and the basic part of the capital of a joint-stock enterprise.
　　 
The basic feature of common stock is that the basic investment interest (dividends and dividends) is not agreed upon at the time of purchase, but is determined afterwards according to the operating accumulation of the company where the stock occurs. The operating accumulation of the company is good, and the income of common stock is reasonable; However, the earnings of common stocks are low due to the difference in the operating real product. Common stock is the most important and basic stock in the capital structure of a joint-stock company, and it is also the most risky stock, but it is also the most basic and common stock.
　　 
Generally, the characteristics of ordinary shares can be summarized as follows:
　　 
(1) Shareholders holding ordinary shares have the right to receive dividends, but they can only receive dividends after the company has paid the debt interest and preferred stock dividends. The dividend of common stock is not fixed, and generally depends on the amount of the company's net profit. When the company is well managed and its profits are increasing, ordinary shares can receive more dividends than preferred shares, and the stock interest rate can even exceed 50%; However, in the years when the company was poorly managed, it could not even get a penny, and it might even lose its capital.
　　 
(2) When the company goes into liquidation due to bankruptcy or winding up, ordinary shareholders have the right to share the remaining assets of the company, but ordinary shareholders can only share the property after the creditors and preferred shareholders of the company. If there is more property, share it more; if there is less, share it less. If there is no such thing, just give up. It can be seen that ordinary shareholders are more closely related to the fate of the company, sharing weal and woe. When the company gains huge profits, ordinary shareholders are the main beneficiaries; When the company loses money, they are the main losers.
　　 
(3) Ordinary shareholders generally have the right to speak and vote on major issues of the company. Ordinary shareholders who hold one share have the right to vote, and those who hold two shares have the right to vote. Any ordinary shareholder is eligible to attend the company's highest level meeting, the annual general meeting of shareholders, but if he is unwilling to attend, he can also entrust a proxy to exercise his voting rights.
　　 
(4) Ordinary shareholders generally have preemptive rights, that is, when the company issues new ordinary shares, existing shareholders have the right to purchase newly issued shares at a preferential price (possibly at a low price) to keep their original percentage of ownership of the enterprise unchanged, so as to maintain their rights and interests in the company. For example, a company has 10000 ordinary shares, but you own 100 shares, accounting for 1%. Now the company has decided to issue 10% more ordinary shares, that is, 1000 more shares. Then you have the right to buy 1%, that is, 10 shares, at a price lower than the market price, so as to keep the proportion of shares you hold unchanged.
　　 
When issuing new shares, shareholders with preemptive rights can not only exercise their preemptive rights to subscribe for newly issued shares, but also sell and transfer their warrants. Of course, when shareholders think that it is unprofitable to purchase new shares, and it is difficult or unprofitable to transfer or sell stock options, they can also allow the stock options to expire. When the company provides share options, it generally stipulates the date of share registration. Shareholders can obtain share options and have the priority to subscribe for new shares only after they register and pay the share price within that date.
　　 
Generally, the shares purchased during the registration date are also called rights attached shares. On the contrary, the voting shares purchased after the equity registration date are called ex rights shares, that is, the shares are no longer sold with warrants. In this way, the investment that purchases shares after the equity registration date will no longer be attached with warrants. In this way, investors (including old shareholders) who purchase shares after the equity registration date have no right to purchase shares at a low price. In addition, in order to ensure the rights and interests of ordinary shares, some companies also have warrants that can purchase a certain number of ordinary shares at a certain price within a certain period (or forever). The warrants of general companies are issued together with stocks and bonds, which can attract more investors. 　　

To sum up, it is easy to see from the first two characteristics of ordinary shares that the dividend and residual distribution of ordinary shares may fluctuate greatly, so ordinary shareholders bear the greatest risk. In this case, ordinary shareholders are of course more concerned about the company's operating conditions and development prospects, and the latter two characteristics of ordinary shares just make this wish come true, that is, they provide and guarantee the means for ordinary shareholders to care about the company's operating conditions and development prospects.
　　 
However, it is also worth noting that when investment shares and preferred shares are publicly issued to ordinary investors, the company should make investors feel that ordinary shares can obtain higher dividends than preferred shares. Otherwise, ordinary shares can not only take risks in investment, but also can not have more dividends than preferred shares. Then who would like to buy ordinary shares! Ordinary companies issue preferred shares mainly to "insurance safe" investors. For those investors who are more "adventurous", ordinary shares are more attractive. In short, the purpose of issuing these two different types of stocks is to attract more capital with different interests.
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3. Post allotment
　　 
Post allotment is a stock that is inferior to ordinary shares in the distribution of interests or interest dividends and residual property. Generally, after the distribution of ordinary shares, the residual interests are redistributed. If the profits of the company are huge and the number of post allotment shares is limited, the shareholders who buy the post allotment shares can obtain high returns. After the issuance of rights issue, generally the funds raised cannot generate immediate income, and the scope of investors is restricted, so the utilization rate is not high. Post allotment shares are generally issued under the following circumstances:
　　 
(1) When the company issues new shares to raise funds for equipment expansion, in order not to reduce the dividend on the old shares, the new shares will be issued as a post allotment before the new equipment is officially put into use;
　　 
(2) At the time of enterprise merger, in order to adjust the merger ratio, a part of the shares will be allocated after being delivered to the shareholders of the merged enterprise;
　　 
(3) In the companies with government investment, the shares held by the government will be used as post allotment shares before the private equity investment reaches a certain level.  

2. Classification according to ticket form
　　 
1. Registered shares
　　 
When such shares are issued, the names of shareholders are recorded on the face of the shares and recorded in the register of shareholders of the company.
　　 
The characteristic of registered stock is that no one can exercise its equity except the holder and its official entrusted agent or legal successor and donee. In addition, registered shares cannot be transferred at will. When transferring, not only the name and address of the transferee must be recorded on the face of the share certificate, but also the transfer procedures must be handled in the company's register of shareholders, otherwise the transfer cannot take effect. Obviously, this kind of stock has the advantages of safety and fear of loss, but the transfer procedures are cumbersome. If such shares need to be transferred privately, such as in case of inheritance and gift, the transfer procedures must be handled immediately after the transfer.  　　
　　 
2. Bearer shares
　　 
When such shares are issued, the names of the shareholders are not recorded on the shares. The holder can transfer the shares on his own. Once he holds the shares, anyone can enjoy the rights of a shareholder without having to prove his shareholder qualification by other means. This kind of stock transfer is simple and convenient, but it should also be realized through legal transactions in the securities market.  　　
　　 
3. Par value shares
　　 
Shares with par value, referred to as par value shares or par value shares, refer to a certain amount recorded on the face of a share, such as 100 yuan, 200 yuan per share, etc. The amount stock sets a par value for the stock, so that it is easy to determine the proportion of each share in the company.  　　

4. No par value shares
　　 
Also called proportional stock or non par stock. There is no record of par value when the shares are issued, which only indicates the proportion of each share in the total capital. Its value increases or decreases with the increase or decrease of the company's property. Therefore, the intrinsic value of such stocks is always in a state of change. The biggest advantage of this kind of stock is that it avoids the deviation between the actual assets and the par value of the company, because the par value of the stock is often empty, and people are not concerned about the par value of the stock, but about the stock price. The issuance of such stocks requires very high requirements on corporate management, financial accounting, legal liability, etc., so it is only popular in the United States, and many countries do not allow issuance at all.
　　 
3. Classification of investment subjects by shares
　　 
The shares of listed companies in China can be divided into state-owned shares, corporate shares and public shares. State owned shares refer to the shares formed by the investment of state-owned assets into the company by the departments or institutions that have the right to invest on behalf of the state, including the shares converted from the existing state-owned assets of the company. Since most of China's joint-stock enterprises are restructured from the original state-owned large and medium-sized enterprises, state-owned shares account for a large proportion of the company's equity.
　　 
Legal person shares refer to the shares formed by an enterprise as a legal person or a public institution with legal personality and a social organization investing in the company's non listed tradable shares with its legally operational assets. At present, in the equity structure of listed companies in China, corporate shares account for about 20% on average. According to the objects of subscription for corporate shares, corporate shares can be further divided into three parts: domestic corporate shares, foreign corporate shares and raised corporate shares. Social public shares refer to the shares formed by individuals and institutions in China who invest their legal property in the tradable shares of the company. China's state-owned shares and legal person shares cannot be listed and traded at present. If national shareholders and legal person shareholders want to transfer their equity, they can sign a transfer agreement with qualified institutional investors within the scope permitted by law and with the approval of the competent securities department, so as to complete the transfer of block equity at one time. Since the proportion of state shares and corporate shares in the total share capital is more than 70% on average, in most cases, to obtain the controlling share of a listed company, the acquirer needs to transfer a block of shares from the original state shareholders and corporate shareholders by agreement. Except that a small number of company's employee shares, internal employee shares and transfer shares are subject to certain restrictions on listing and circulation, most of the public shares can be listed and traded.
　　 
4. Classification by listing place
　　 
The shares of listed companies in China are divided into A-share, B-share, H-share, N-share and S-share. This distinction is mainly based on the listing location of stocks and the investors they face.
　　 
The official name of A-share is RMB common stock. It is the common stock issued by companies in China for domestic institutions, organizations or individuals (excluding investors from Taiwan, Hong Kong and Macao) to subscribe and trade in RMB. The official name of B shares is RMB special shares. It is denominated in RMB, subscribed and traded in foreign currencies, and listed on domestic (Shanghai and Shenzhen) stock exchanges.
　　 
Its investors are limited to foreign natural persons, legal persons and other organizations, natural persons, legal persons and other organizations in Hong Kong, Macao and Taiwan, Chinese citizens residing abroad, and other investors specified by the CSRC. At present, the investors of B shares are mainly institutional investors in the above categories.
　　 
Both the place of registration and the place of listing of B-share companies are in China, except that investors are overseas or in Hong Kong, Macao and Taiwan of China. H shares are foreign shares registered in the Mainland and listed in Hong Kong. The English of Hong Kong is Hong Kong. Taking its prefix, foreign shares listed in Hong Kong are called H-shares. By analogy, the first English letter in New York is N, and the first English letter in Singapore is S. The stocks listed in New York and Singapore are called N shares and S shares respectively.
　　 
5. Classification by company performance
　　 
Blue chip stocks are the stocks of companies with good performance, but the definition of blue chip stocks is different at home and abroad. In China, the main indicators for investors to measure blue chip stocks are after tax profit per share and return on equity.
　　 
Generally speaking, after tax profit per share is in the upper middle position among all listed companies, and the stocks whose return on equity after listing has significantly exceeded 10% for three consecutive years are among the blue chip stocks. In foreign countries, blue chip stocks mainly refer to the stocks of large companies with good performance and relatively stable performance. After a long time of efforts, these large companies have achieved a high market share in the industry, formed an advantage in business scale, steadily increased profits, and had a high market reputation.
　　 
Blue chip stocks have high investment return and investment value. Its company has advantages in capital, market, reputation, etc., and has a strong adaptability to various market changes. The share price of blue chip stocks is generally relatively stable and shows a long-term upward trend. Therefore, blue chip stocks are always favored by investors, especially stable investors engaged in long-term investment. Corresponding to the blue chip stocks, the junk stock index refers to the stocks of companies with poor performance. Some of these listed companies even went into the ranks of losses due to poor industry prospects or poor management.
　　 
The performance of its stock in the market is sluggish, its share price is low, its trading is not active, and its year-end dividend is also poor. When considering these stocks, investors should have a high sense of risk and avoid blindly following the trend of speculation.