Value Investing
InvestingGlossary term
Definition
A strategy of buying stocks that appear undervalued relative to their intrinsic worth based on fundamental analysis. Pioneered by Benjamin Graham and Warren Buffett, it focuses on companies trading below their book value or with low P/E ratios.
Related terms
- Value StockStock trading below its intrinsic value based on fundamentals. Often established companies with low P/E ratios and steady dividends. Contrasts with growth stocks.
- Growth InvestingAn investment strategy that targets companies expected to grow revenue and earnings at above-average rates, even if their current stock price appears expensive. Growth investors focus on potential future value rather than current metrics like dividends or low P/E ratios.
- Fundamental AnalysisEvaluating a stock by examining financial statements, management, competitive advantages, and economic factors to determine intrinsic value. Contrasts with technical analysis.
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