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Value stocks

Value Stocks

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

Geometric Mean Return

A way of calculating compound returns on an investment or savings over a set period of time.

Forward pricing

Mutual funds are traded on a forward pricing basis, meaning the price you see will be different to the price you may trade at.

Accrued interest

The interest earned on a gilt since the last dividend date. When buying a gilt, the buyer pays the accrued interest at the time of a transaction to the seller in addition to the clean price of the gilt

Equity

The amount of money a company would be left with by subtracting its liabilities from the value of its assets.

Unicorn

A startup valued at over £1 billion. They are rare, hence the name.

United States Dollar (USD)

The famous greenback our friends in the US use as currency.

Maturity date

The date on which a gilt is redeemed and the gilt holder receives the repayment of the nominal amount and final dividend or coupon payment.

Holding Period Return

The amount of money generated by an asset during the time that it was held by an investor..

Ponzi Scheme

A form of fraud designed to lure new investors, and pays the earlier backers by using the new investors' money.

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