Value Index

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Value Index

An index tracking value stocks, which are stocks with prices lower than their intrinsic values. One may identify stocks for a value index in a variety of ways, but two of the most popular are finding companies with low P/E ratios or low price-to-book ratios. In both cases, the share price for a company is lower than its earnings per share or its asset value per share. Value indices may have high profit potential because it is thought that the share prices will eventually rise to match the stocks' real value.
References in periodicals archive ?
index options market, CBOE offers investors the most liquid and diverse index options complex in the world, and options on the Growth and Value Indexes will be important additions to this complex.
CME President Bill Brodsky said, "The Growth and Value indexes will allow the Merc to continue its successful relationship with S&P and to build on the success of our S&P 500 futures and options.
The S&P 500/BARRA Growth and Value Indexes are constructed by dividing the stocks in the S&P 500 index according to book-to-price ratios.
The Dow Jones Canada Growth and Value Indexes will add to already existing Dow Jones Style Indexes from the U.
Michael Petronella, managing director of Dow Jones Indexes said, "The Dow Jones Canada Growth and Value Indexes will provide investors an additional asset allocation tool and give pension plans more precise benchmarks to measure the performance of their asset managers.
The stocks are also members of either the Russell 1000 Value and Russell 2000 Value indexes.
Negative performance of financial services stocks drubbed the value indexes, where the sector is heavily weighted.
When financial services stocks perform poorly, value indexes tend to suffer," Hintz said.
These price-to-book figures are the basis for classifying stock shares in Russell's growth or value indexes.
In addition, BARRA offers the S&P 500/BARRA Growth and Value indexes and the S&P Midcap 400/BARRA Growth and Value indexes.
BARRA also offers BARRA Canadian Growth and BARRA Canadian Value indexes which are subsets of the Toronto Stock Exchange 300 index.
The stocks are also members of the Russell 1000 Value and Russell 2000 Value indexes.