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

Global Investment Performance Standards (GIPS)

A set of standards which investors use to present their investment results.
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Withholding Tax

A tax deduction made at the source of the payment.
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Hedge Fund

Investment funds that are often associated with riskier and shorter-term trading strategies.
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Running yield

The annual interest payment (dividend) divided by the current market price of a bond.
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Net asset value

Mutual funds and investment trusts are priced on their net asset value (NAV).
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Income statement

A summary of a company's income and expenses over a set period of time.
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Conventional gilts

Gilts where the dividends and principal repayments are fixed in nominal terms. This is as opposed to an index-linked gilt where the dividends and principal repayments are related to movements in the Retail Prices Index (RPI).
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52-week high/low

The highest, or lowest, price a share has traded at in a passing year.
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Real Estate Investment Trust (REIT)

An investment trust specialised in investing in commercial property such as parking garages or GP offices.
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