Value Stocks - Page 4

Value stocks are shares of companies that are considered undervalued compared to their intrinsic worth, often identified by low price-to-earnings (P/E) ratios, low price-to-book (P/B) ratios, or other financial metrics. Investors in value stocks believe that the market has mispriced these stocks, providing an opportunity to buy them at a bargain price. The rationale is that, over time, the market will recognize the company's true value, leading to a price correction that yields capital gains for investors. Value investing is based on the principle of fundamental analysis, focusing on company financials, economic conditions, and industry performance. Value stocks are typically associated with established companies that may face short-term challenges, but have solid fundamentals and growth potential in the long run.