Value Investing Back In Favour

Value investing consists of buying unappreciated or ignored stocks which have good fundamentals and are available at attractive prices. Value investors seek stocks that are priced attractively relative to a stock’s intrinsic worth. For instance, they look for stocks selling at temporarily low multiples relative to their book value, cash flow, earnings or sales. The idea of investing in such names is that while these stocks may be beaten down at present, eventually as the market wakes up to the worth of these names, the stock prices will rise. As a result of this approach, most often value investing will tend to keep away from investing in names which are in vogue at a given point in time.