# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Value Investing

What is Value Investing?

Value investing is an investment approach emphasizing stocks that are selling at a price below their worth.  

Investors can define value differently. Some might use a discounted cash flow model, which entails forecasting a business’ cash flows to estimate its intrinsic worth. Others might use price-based metrics like price/earnings and price/book to compare businesses. Still, others might use a combination of techniques.

Value investors can also differ in the shades of undervalued businesses they seek. A deep-value investor, for instance, likes risky companies in bankruptcy: They have bottom-of-the-barrel valuations and high upside if they recover from disaster. Contrarily, relative-value investors like companies that are cheaper than peers, often because they have fallen out of favor, but they aren’t necessarily near bankruptcy.

Sponsors Center
Sponsored Links