Since investment in value stocks
, under-priced stocks, do usually have lower value than investment in glamour stocks, over-priced stocks, do, negative earnings surprises due to accounting irregularities would decrease value stock
prices more than glamour stock prices.
minority and marketability discounts) apply to value stock
when used as a bonus to transfer ownership.
Conversely, a value stock
represents a company whose financial position, as well as industry and economic conditions, indicates that its true value is higher than the stock price.
A value stock
is one in which the company's parts are worth more than the whole.
For example, while Merck (NYSE: MRK) might not be considered a typical value stock
, it has been beaten down, so its price relative to its future earnings potential makes it a less expensive drug company to own, he says.
Another value stock
expert in attendance was Nathaniel Carter, president and chief investment officer of Lakefront Capital Investors, a Cleveland money management firm running $20 million in institutional assets and the newly minted Key Victory Lakefront Fund to boot.