4 ms·

If I may ask, what do you mean by “value” stocks?

• skohan 6y ago
  Stocks with a low P/E ratio. I.e. the total market cap is low relative to their earnings.
  • dmurray 6y ago
    That's not the definition used in the article, which looks at stocks which have low market cap compared to book value, i.e. total reported assets.
    • mcguire 6y ago
      Those are two valid definitions of value stocks. Earnings are easy to calculate but not terribly good. Book value is a better measure but it's just a made-up number.
  • mxschumacher 6y ago
    The p/e ratio is extremely crude and should be avoided at all costs. The metric completely disregards capital structure (debt to equity) and uses earnings at a single point in time. Earnings can easily be manipulated. Better to look at Enterprise value / free cash flow