Value investing

Value investing – investing in companies where their shares are on cheaper valuations than the market values them at. Investor can make money when the markets “appreciates” the actual value of an undervalued company and the share price rises to the NAV or a premium.

Value stocks can have higher dividend yields than growth stocks.

The investor must decide that the value company is of a higher quality than other investors believe. There needs to be a catalyst for that opinion to change. The eventual re-rating is what allows the value to make money, as the share price rises accordingly

A value stock is a company whose shares tends to trade at a lower price relative to its fundamentals, such as dividends, earnings and sales.

See also Growth investing

Value investing

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