What Is A Value Stock Investment Strategy?
Value investors actively seek stocks of companies that they believe the market has undervalued. They believe the market overreacts to good and bad news, resulting in stock price movements that do not correspond with the company’s long-term fundamentals. These stocks are neglected by the market and their price is lower than their “real value”.
How do you know the true value of a stock? Value investors typically pay extra attention to the fundamentals of the business to try to figure out if a stock is being under-valued.
Value Stock Investment Strategy Criteria
- Earnings
- Earnings growth
- Cash flow
- Dividends
- Book value
- Industry growth
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