Value Stock

A value stock is a stock that is currently undervalued and has good expectations of price appreciation. In theory, value stock is only temporarily out of favour; when market conditions change and investor interest returns; the value stock will appreciate. A value stock usually pays little in dividends and is likely to be richly valued by conventional valuation methods. It is a safer investment because of its underlying value; however, in a bull market where investor optimism is heady, a value stock may well perform worse than a growth stock.

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