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The state in which a security's price is lower than it ought to be. A stock may be undervalued, for example, when its earnings and financial outlook are both strong, but its share price is still comparatively low. A number of factors may cause undervaluation, including lack of investor knowledge about the company, which, in turn, leads to low demand for its securities. Value investors seek out undervalued companies because they tend to provide solid returns for lower prices.


Any stock that trades at a lower price than the issuing company's reputation, earnings outlook, or financial situation would seem to merit is considered undervalued.

Undervaluation may occur when investors lose interest in a company, perhaps because it hasn't kept pace with its competitors, or if there are management problems.

Some investors concentrate on identifying and investing in undervalued stocks, sometimes called simply value stocks, drawn by their bargain prices and the expectation of recovery.

References in periodicals archive ?
As the current conflict shows, linguistic ability is a critical, yet often under-valued, skill in the U.
A privately-held corporation, CFH Group, under the leadership of Tomas Cabrerizo, acquires under-valued, under-managed, or physically distressed apartment communities and/or commercial properties in superior locations throughout Florida.
About ENact(TM) Nutrition has been recognized as a positive contributor to healthcare outcomes, yet it remains a critically under-leveraged and under-valued element of patient care.
Praediumis a real estate investor focusing on under-performing and under-valued assets throughout North America, with $4 billion in total investments to date in 1,200 assets comprised of 33 million s/f of commercial space and 28,000 multi-family units.
Miss Pyrah said: "I passionately believe our historic environment in the North East is an under-used and under-valued asset.
WHAT makes Mr Heggie feel he's qualified to comment on the improved pay conditions currently sought by Scotland's under-valued, under-paid nursery nurses?
Villa are one of 11 Premiership clubs trading on the Stock Market and Brian Sturgess, the chairman and financial analyst of Soccer Investor Ltd, believes that the club is drastically under-valued.
Mrs Morgan said: ``Nobody wants to see strike action, but they appear to be at the end of their tether and feel grossly under-valued.
We're still an under-valued market," said Kolari, "especially when you consider the home prices in southern Ontario.
David Moore, President of Techalt, stated, "The Company continues its mission to target and acquire under-valued, performing assets that are positioned to scale upward, and to couple these assets with financing and experienced management.
Mr Zarins, 31, thinks graduates like him are under-valued in the job market.
Speaking at Meat South West Conference on April 7, he went on to talk about tackling the problem of under-valued cuts.