close
test_template

The Art of Value Investing

Human-Written
download print

About this sample

About this sample

close
Human-Written

Words: 415 |

Page: 1|

3 min read

Published: May 19, 2020

Words: 415|Page: 1|3 min read

Published: May 19, 2020

Table of contents

  1. Intrinsic Value
  2. What Do Investors Look For?
  3. Value Investing & Having a Margin of Safety
  4. An Effective Investment Strategy

Value investing is an investment strategy where securities trade for less than their intrinsic values. Investors seek stocks that are considered ‘undervalued’ in the market, believing that current price fluctuations do not align with the company’s long-term fundamentals. Value investors ultimately profit off of irrationality and market overreactions to various factors including reports of declined revenue or a significant decrease in earnings.

Kenneth Orr – a Chief Investment Officer of KORR Acquisitions located in Old Westbury New York, states that through a comprehensive analysis, value investors identify stocks where there is a gap between current price and intrinsic value, assuming there is high growth potential. Kenneth claims that quantitative value investment strategies are becoming increasingly popular and outlines some of the key components of the method.

Intrinsic Value

Intrinsic value refers to the ‘fundamental’ value of a security as opposed to the current market price. Value investors purchase stocks under the impression that a company is valuable as an ongoing business. Investors perform a comprehensive analysis to look at both qualitative and quantitative aspects of a company, taking into consideration a variety of external factors. By performing an analysis, investors are more likely to gain sufficient returns on their investment.

What Do Investors Look For?

According to Kenneth Orr, investors searching for undervalued stocks will consider a variety of factors when performing an analysis of a company and before selecting an investment candidate. These factors include searching for low price-to-book ratios, high-dividend yields, a debt to equity ratio of less than one, and strong earnings for an extended period. Ultimately, value investors are primarily concerned with long-term business fundamentals as opposed to other influences on stock prices.

Value Investing & Having a Margin of Safety

Many savvy investors practice the art of value investing, hoping to gain a profit when an asset increases in market value. A margin of safety is a principle of value investing, where an investor will only purchase securities when the market price is significantly lower than the intrinsic value or calculated price. Having a margin of safety gives investors room for error, while still generating a substantial profit.

Get a custom paper now from our expert writers.

An Effective Investment Strategy

Kenneth Orr states that calculating intrinsic value will not mitigate risk or eliminate all loss; however, value investing it is a proactive means to measure the financial state of a company. With an extensive professional resume, Kenneth is a respected investment officer and is an activist for undervalued publicly traded companies. He states that ultimately value investing is a powerful strategy individuals can utilize to generate capital.

Image of Prof. Linda Burke
This essay was reviewed by
Prof. Linda Burke

Cite this Essay

The Art Of Value Investing. (2020, May 19). GradesFixer. Retrieved November 12, 2024, from https://gradesfixer.com/free-essay-examples/the-art-of-value-investing/
“The Art Of Value Investing.” GradesFixer, 19 May 2020, gradesfixer.com/free-essay-examples/the-art-of-value-investing/
The Art Of Value Investing. [online]. Available at: <https://gradesfixer.com/free-essay-examples/the-art-of-value-investing/> [Accessed 12 Nov. 2024].
The Art Of Value Investing [Internet]. GradesFixer. 2020 May 19 [cited 2024 Nov 12]. Available from: https://gradesfixer.com/free-essay-examples/the-art-of-value-investing/
copy
Keep in mind: This sample was shared by another student.
  • 450+ experts on 30 subjects ready to help
  • Custom essay delivered in as few as 3 hours
Write my essay

Still can’t find what you need?

Browse our vast selection of original essay samples, each expertly formatted and styled

close

Where do you want us to send this sample?

    By clicking “Continue”, you agree to our terms of service and privacy policy.

    close

    Be careful. This essay is not unique

    This essay was donated by a student and is likely to have been used and submitted before

    Download this Sample

    Free samples may contain mistakes and not unique parts

    close

    Sorry, we could not paraphrase this essay. Our professional writers can rewrite it and get you a unique paper.

    close

    Thanks!

    Please check your inbox.

    We can write you a custom essay that will follow your exact instructions and meet the deadlines. Let's fix your grades together!

    clock-banner-side

    Get Your
    Personalized Essay in 3 Hours or Less!

    exit-popup-close
    We can help you get a better grade and deliver your task on time!
    • Instructions Followed To The Letter
    • Deadlines Met At Every Stage
    • Unique And Plagiarism Free
    Order your paper now