Value investing

By | 2017-09-14T09:56:56+00:00 14th September 2017|

An investor adopting a value philosophy seeks stocks where the market has not reflected the full “intrinsic value” (the assessed future value) and may be due to attain that intrinsic value by the price rising, a “re-rating”. Value managers purchase companies on the basis of a low price/earnings ratio, for example. Another example is they could believe that a stock offering a combination of a low P/E ratio and a high dividend yield (the dividend per share divided by the current market price) would provide the best returns.