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Finance Dictionary and Glossary of Investment Terms
An investment style which favors good stocks at great prices over great stocks at good prices. Utilizes such valuation measures as price to book ratio, price/earnings ratio and yield.
Investing in companies that are believed to be good value compared to industry peers or average stocks in their asset class. Value stocks are usually priced low relative to their historical average and have low price-to-earnings ratios or price-to-book ratios. Compare to growth investing. Value portfolios tend to have lower turnover than growth portfolios.
The process of selecting stocks that trade for less than their intrinsic value. A value investor typically selects stocks with lower than average price-to-book or price-to-earning ratios.