Value Stocks

What are value stocks?

One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.

Value stocks are stocks trading lower than their financial fundamentals suggest. They are perceived as undervalued, and have the potential to rise. Many new tech stocks, for instance, start out as growth stocks and transition into value stocks.

They have a low price-to-earnings and price-to-book ratios—which is why they’re less expensive than growth stocks. Due to this fundamental distinction, a value stock is often traded at a more affordable rate than a growth stock.

To investors, they see companies that fall into this category as undervalued. These investors are less likely to invest in a growth stock because they feel that value company’s stock will eventually reach their full potential once they are recognized by the market.

Generally speaking, the climb is steady for value stocks. The only other way for it to emerge into the market like a growth stock is for it to be a bit more innovative with its products or services.

Pat McKeough is an expert at delving into a company’s financial statements and identifying undervalued securities and value stocks. That’s because value stocks are the foundation of any long term investment strategy, at TSI Network we also recommend our three-part Successful Investor strategy:

  1. Invest mainly in well-established companies;
  2. Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; the Consumer sector; Finance; Utilities);
  3. Downplay or avoid stocks in the broker/media limelight.

Quality Stocks, Bargain Prices: read this FREE Special Report, Canadian Value Stocks: How to Spot Undervalued Stocks & Our Top 4 Value Stock Pick.

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Value Stocks Post Archives

Stocks That Are Going Up Can Be Riskier Than They Appear

Stocks That Are Going Up Can Be Riskier Than They Appear

Momentum stocks that are going up may look like winning investments, but they can simply be gambles in disguise
Successful investors try to arrange their portfolios so that they more-or-less automatically tap into the profit and long-term growth that inevitably comes to well-established companies operating… Read More

A Pat McKeough Q&A on Value Stocks

A Pat McKeough Q&A on Value Stocks

What are value stocks truly worth? The answer depends on a number of factors, including hidden assets and profit potential
What are value stocks? The best value stocks are low in price and high in potential.

One of the sweetest and most profitable pleasures of successful investing… Read More

3 Tips for Successful DIY Stock Valuation

3 Tips for Successful DIY Stock Valuation

If you want to determine stock valuation on your own, try using price-to-sales, price-to-earnings, and price-to-book-value ratios
No matter which financial ratio you consult, remember it only gives you a partial view of a company’s strengths and weaknesses. So use more than just one when determining… Read More

Gannett continues its digital push

GANNETT CO., INC. $12 (New York symbol GCI; Conservative Growth Portfolio, Consumer sector: Shares outstanding: 111.8 million; Market cap: $1.3 billion; Price-to-sales ratio: 0.4; Dividend yield: 5.3%; TSINetwork Rating: Average; publishes over 100 U.S. daily newspapers and their associated websites. That includes the company’s… Read More

Dividend Investing vs Value Investing

Dividend Investing vs Value Investing

In choosing dividend investing vs value investing, it’s important to recognize that both can lead to favourable returns

The best dividend stocks respond to tough economic times by doing their best to maintain, or even increase their payouts.

Value stocks can test your patience by moving sluggishly… Read More