The market is imperfect – value investing can help you profit from it
As regular equity investors know, company stock prices fluctuate from day to day. In the short term, these movements are driven by market sentiment, individual trading objectives and endless speculation and interpretation of news and data. In all these scenarios, the core underlying performance of the company may not have changed, and therefore neither has its intrinsic value.
Intrinsic value is based on a careful evaluation of a company’s true performance and an assessment of the risk of investing in that business. While market prices typically gravitate towards value over time, in the short term, they can be significantly mispriced. Value investing seeks to exploit this opportunity, by acquiring stocks in good companies that are ‘priced’ below their true ‘value’.
The concept of value investing is not new; first derived in 1928, its most famous proponent (and one of the world’s most successful investors) is Warren Buffett. What this highlights, is that more important than the ‘formula’ is the quality of assumptions and inputs behind that formula. Our platform is powered by a team of investment analysts with a proven track record of outperforming the market.
StocksInValue does the intrinsic value calculations for you – including, accounting for the unique benefit of franking credits that investors receive in Australia. We then present them in an easy to access format and overlay a variety of other quantitative and qualitative investment lenses to deepen your investment insights.
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