Value Investing
Main philosophy behind value investing strategy is effort to buy stocks for less than they are worth, so called undervalued stocks.
It is said that value investors seek good stock at great prices rather than great stocks at good prices.
Undervalued stocks are stocks with market value lower than their intrinsic value. When buying undervalued stocks, investors are driven by belief that these stocks will not be undervalued indefinitely. Often, undervalued stocks are characterized by lower P/E and price to book ratio, as well as high dividend yields.
The biggest problem in value investing is determining the intrinsic value of a stock.
| Related Terms: Turnaround |