Value Analyzer
An Introduction to Value Investing

An Introduction to
Value Investing

A Value Investing strategy is used by some of the world's most successful investors. Value Analyzer can help you decide whether a stock represents a good business available at a good share price to support your value investing strategy.

4 min read

Value Investing is popularized by some of the world's most successful investors.


Pick solid companies that have a history of consistently growing revenue and EPS (Earnings Per Share).

On a logarithmic graph, the revenue and EPS lines will appear straight when a company is growing consistently.


The slope of the line indicates how fast the growth rate is.

As a reference, Value Analyzer shows dashed lines that represent: 10, 20 and 30% growth rates.


What happens if the EPS is negative? 

If the EPS is negative, it is plotted at zero for that year, as it is done on the Fair Value chart. The fair value of companies with negative earnings is theoretically zero.

Once you find a company, you will need to decide whether the current stock price is appropriate.


The first step in this process is to see how close the stock price is to "Fair Value".

In general, if the price is above the Fair Value line this indicates a stock is over priced, below is under priced.

Value investors generally buy and hold, as long as the company continues to grow its earnings at the expected rate.

To ensure that the expected growth will continue, keep up to date with the company news by reading annual reports and new releases.

When to consider selling: 
1. The companies growth rate has slowed or become negative.
2. The stock has become greatly overvalued.
3. The business climate for the company has substantially changed.
4. Other value stocks are more compelling, and offer a greater potential return.

When one or more of these are true, then selling may be the right choice.

We hope you now understand how beneficial it is to have the Trading Central research team on your side and how simple it is to harness their insights! Take advantage of Analyst Views today to plan your trades with expert technical analysis!

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