Basically, a value stock has a low price to book value and a low price to earnings ratio. In determining whether a stock is inexpensive or not, one needs to analyze the company’s book value, also known as shareholders’ equity. You need to determine what the true net worth of a company is by calculating a tangible book value.
http://myinvestingnotes.blogspot.com/2010/07/characteristics-of-value-stocks_23.html
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