Saturday, October 19, 2013

On Value Stock

I have recently seen the term, "value stock". The definition is:

 A stock that tends to trade at a lower price relative to it's fundamentals (i.e. dividends, earnings, sales, etc.) and thus considered undervalued by a value investor. Common characteristics of such stocks include a high dividend yield, low price-to-book ratio and/or low price-to-earnings ratio. 

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