Value stocks

Value stocks

Stocks with low price/book ratios or price/earnings ratios. Historically, value stocks have enjoyed higher average returns than growth stocks (stocks with high price/book or P/E ratios) in a variety of countries.

Value Stocks

Stocks with prices lower than their intrinsic value. One may identify value stocks 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 stock price for a company is lower than its earnings per share or its asset value per share. These companies are thought to have high profit potential because it is thought that the share price will eventually rise to match the company's real value. See also: Buy and hold, Warren Buffett, Benjamin Graham.
References in periodicals archive ?
While value investors share a lot in common -- both look for stocks with low price-to-fundamentals stock ratios and both agree that value stocks "co-move" with one another.
This strategy calls for buying value stocks and selling glamour stocks.
Summary: Data from Russell Indexes shows that growth stocks in Asia continue to outperform value stocks.
Whether it's growth stocks, value stocks, momentum stocks, stocks benefiting from emerging growth in China or our stock-of-the-month report, each product is represented with its own distinct marketing message.
A 1998 article in Forbes magazine indicated that value stocks outperform growth stocks by 4%, and carry substantially lower risk as well.
Value stocks are those companies with a low price-to-book.
The idea is not to add value stocks when the market turns down.
For balance," says Reading, "Guy's portfolio holds Vanguard Value Index Fund (VIVAX), which holds the low-priced value stocks in the [Standard & Poor's 500-stock index].
Many investors are asking whether "value" stocks still represent good value for one's investment dollar, and if so, under what conditions value stocks can be expected to generate good performance.
For the three months ending in August, indexes analyzed by Merrill Lynch (ML) showed value stocks up just 6.
This will no doubt sort itself out when the Fed raises interest rates, but what happens to value stocks in the meantime?
Another investor who has felt the chill of the stealth bear market is Tom Bartkoski, whose diversified portfolio is weighted toward so-called value stocks, or those whose prices are low relative to earnings, assets and sales.