Value investing

An investment strategy which selects stocks that are considered to be undervalued by the market when current earnings and assets are taken into account. Value investors look for good stocks at cheap prices rather than great stocks fair prices. This usually involves buying stocks with a low-price-to-book or price-to-earnings ratio along with high dividend yields. However, value investing is very subjective as different investors have different methods of estimating a share’s intrinsic value.

This definition is for general information purposes only