Graham and Dodd method of investing

Graham and Dodd method of investing

An investment strategy based on security analysis and identification. Investors buy stocks with undervalued assets speculating that these assets will appreciate to their true value.

Value Investing

An investment strategy in which one seeks securities thought to be undervalued. One may do this in a variety of ways, but two of the most popular are finding companies with low P/E ratios or low price-to-book ratios. In both cases, the stock price for a company is lower than its earnings per share or its asset value per share. These companies are thought to have high profit potential. Analysts disagree on the tools for value investing, but most use some form of fundamental analysis and look for companies with an underlying value of more than its price. See also: Buy and hold.