Value Stocks

Value stocks maybe undervalued is one of the best-known stock-picking methods. Developed in the 1930s, Benjamin Graham and David Dodd, finance professors at Columbia University, laid out what many consider to be the framework for value stocks. The concept is actually very simple: find companies trading below their inherent worth.

  • P/E to Earnings Growth (5yr)       <= 1.2
  • Earnings Growth (5yr.)                   >=15% and <=30%
  • Revenue Growth (5yr.)                   >=5%
  • Market Capitalization                     <5 Billion (Mid or Small)
  • Volume                                              > 400,000 shares
  • Debt to Equity Ratio                      <= 35%
  • P/E ratio lower than normal for its industry