What Is Value Investing?

Often seen as the opposite of growth investing, value investingseeks to maximize returns by finding stocks that are undervalued by the market. According to this strategy, investors assess a stock's intrinsic value, often through a valuation methodlike discounted cash flow analysis, and compare that value with the stock price.

If there is a significant margin of safetybetween the value and the price, meaning the intrinsic value is greater than the market value by a pre-determined amount, the value investor will buy the stock.