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Value Investing

Find quality companies trading below their intrinsic value

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What Is Value Investing?

Value investing is about finding stocks that are trading for less than they're actually worth. Think of it like shopping for a quality coat that's on sale — you're getting something good at a price below its true value.

This strategy was popularized by Benjamin Graham and his student Warren Buffett. The idea is simple: buy when the market underestimates a company's worth, hold while the market corrects itself, and profit from the difference.

Value investors look for companies with strong fundamentals (good earnings, solid balance sheets, competitive advantages) that are temporarily out of favor with the market. This creates a margin of safety — room for error while still making money.

Key Metrics We Use

Price-to-Earnings (P/E) Ratio

Lower is typically better. A low P/E means you're paying less for each dollar of earnings. We look for P/E ratios below the industry average.

Price-to-Book (P/B) Ratio

Compares stock price to the company's book value. A P/B under 1.5 often signals undervaluation relative to assets.

Debt-to-Equity Ratio

Lower debt means less financial risk. We prefer companies with manageable debt levels and strong balance sheets.

Return on Equity (ROE)

Measures how efficiently a company generates profit from shareholder equity. Higher ROE indicates better management.

How We Score Value Stocks

Our scoring system evaluates each stock on multiple value criteria and assigns a score from 0-100. Here's what we look for:

Real Examples

Company A (Financial Sector)

Strong bank with temporary market concerns

87

P/E Ratio

9.2

P/B Ratio

1.1

ROE

14.5%

Debt/Equity

0.8

Company B (Consumer Goods)

Established brand trading below historical average

82

P/E Ratio

12.8

P/B Ratio

1.4

ROE

18.2%

Debt/Equity

0.5

Is Value Investing Right for You?

✅ Best For:

  • • Patient, long-term investors
  • • People who can ignore short-term noise
  • • Those who like fundamental analysis
  • • Conservative risk profiles

⚠️ Not Ideal For:

  • • Day traders or swing traders
  • • Those seeking quick gains
  • • Investors who panic during volatility
  • • People who need immediate income

Ready to Find Undervalued Stocks?

See today's highest-scoring value stocks based on our systematic analysis.

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