What is 'Value Stocks'? | Freetrade Dictionary

Stocks in companies that aren’t necessarily growing fast, but instead are dependable and stable.

These are stocks in companies that aren’t necessarily growing fast, but instead are dependable and stable. The stock price might be less than what the company is actually worth.

Investors choose value stocks because they expect the market to realise the true value of the stock over time, and the price will rise.

Value stocks tend to have a lower price-to-earnings (P/E) ratio, pay dividends, and are seen as lower risk with steadier returns. Please keep in mind that no stocks are risk free and you may lose what you put in.

Older, established companies like banks, manufacturers, or consumer goods firms are typically where you will find value stocks.

More terms

Investment Return

The amount of money made or lost from an investment. Usually expressed as a percentage.

DMO

The United Kingdom Debt Management Office. It’s an executive agency responsible for managing the government’s debt and cash needs, primarily through issuing gilts and Treasury bills.

Know Your Customer (KYC)

A legal requirement for financial firms to understand exactly who their customers are. Used to prevent money laundering and terrorist financing.

NASDAQ

A US stock exchange specialising in the shares of technology companies.

Wall Street

A street in New York that became a figure of speech for the financial markets of the US.

Key Information Document (KID)

A document issued by an investment fund to help investors determine if it's the right fund for them.

Beta

Learn what Beta stands for in finance.

Zero-Sum Game

A situation in which one person's gain is another's loss.

index-linked gilts

Gilts where the dividends and principal repayments are related to movements in the Retail Prices Index (RPI). This is as opposed to a conventional gilt, where the dividends and principal repayments are fixed in nominal terms.

Value Stocks