What are value stocks?
Some investors choose to focus on value stocks. Find out what they are and how to identify them in the MoneySense Glossary.
Why are mortgages so expensive in Canada?
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Stocks viewed as bargains relative to the underlying value of the business are referred to as value stocks. Value stocks are often identified by low price-to-book-value (P/B) ratios or low price-to-earnings (P/E) ratios. Investors expect to profit when prices eventually rise to reflect the intrinsic value of the business.
Example: “When researching value stocks, investors must determine whether a stock trading at a low price-to-earnings ratio is truly a bargain or just a bad business trading at a fair price.”
Read more on value stocks:
- What do value investors believe in?
Value investing is a strategy that involves buying undervalued stocks. These are the three key principles you’ll need to know. - Canada’s best dividends 2022: How we chose the winners
A-grade stocks represent our top picks—and, reflecting a challenging set of market conditions, they’re scarcer than usual. But there are many strong Bs worth a look. Here’s how we graded this year’s winners. - Why isn’t everyone a value investor?
Despite the evidence that, over the long run, value stocks generate better returns, that isn’t how most people, not even professionals, invest. A professor of finance examines the reasons for our irrational choices.
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