Undervalued

Undervalued
A financial security or other type of investment that is selling for a price presumed to be below the investment's true intrinsic value. A undervalued stock can be evaluated by looking at the underlying company's financial statements and analyzing its fundamentals, such as cash flow, return on assets, profit retention and capital management, to determine said stock's intrinsic value.

Buying stocks when they are undervalued is a key component of mogul Warren Buffett's value investing strategy. Value investing is not foolproof, however. There is no guarantee as to when or whether a stock that appears undervalued will appreciate. There is also no single correct way to determine a stock's intrinsic value - it is basically an educated guessing game.


Investment dictionary. . 2012.

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Look at other dictionaries:

  • undervalued — adjective Thesaurus: not liked or lovedsynonym Main entry: undervalue …   Useful english dictionary

  • undervalued — A stock price perceived to be too low or cheap, as indicated by a particular valuation model. For instance, some might consider a particular company s stock price cheap if the company s price earnings ratio is much lower than the industry average …   Financial and business terms

  • undervalued — /ˌʌndə vælju:d/ adjective not valued highly enough ● The dollar is undervalued on the foreign exchanges. ● The properties are undervalued on the company’s balance sheet. ▪▪▪ ‘…in terms of purchasing power, the dollar is considerably undervalued,… …   Marketing dictionary in english

  • undervalued — /ˌʌndə vælju:d/ adjective not valued highly enough ● The dollar is undervalued on the foreign exchanges. ● The properties are undervalued on the company’s balance sheet. ▪▪▪ ‘…in terms of purchasing power, the dollar is considerably undervalued,… …   Dictionary of banking and finance

  • Undervalued stock — An undervalued stock is defined as a stock that is selling at a price significantly below what is assumed to be its intrinsic value (finance). For example, if a stock is selling for $50, but can be determined to be worth $100 based on predictable …   Wikipedia

  • undervalued — adjective Assigned an in appropriately low value …   Wiktionary

  • undervalued — v. value at lower than the true worth, underestimate …   English contemporary dictionary

  • undervalued — adjective 1》 rate insufficiently highly; fail to appreciate. → undervalue …   English new terms dictionary

  • undervalued —   sottovalutato   Bene d investimento il cui prezzo di riferimento sul mercato è inferiore a quello ottenuto valutandolo secondo specifici e adeguati criteri, ad es. un titolo azionario può essere sottovalutato se, nonostante il buono stato della …   Glossario di economia e finanza

  • undervalued — See: undervalue …   English dictionary

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