Value

Stocks of companies which trade at a lower price relative to its fundamentals are termed value stocks. Mature companies with stable cash flows but moderate growth rates usually trade at low levels. However sometimes negative perception about the industry or company due to multitude of reasons might also result in stock price of the company taking a beating resulting in cheap valuation

Value investors seek out stocks with strong fundamentals – high operating and net income margin, positive operating cash flow, low debt to equity ratio, high return on equity etc – that are trading at a bargain. The investor hopes to gain via capital appreciation when the market identifies the true potential of the stock and price increases

Examples of value investing strategy available on smallcase platform are:

Bargain Buys

This smallcase is designed for a layman investor and consists of stocks which boast of strong financial position, manageable debt and stable earnings. It is based on Benjamin Graham’s investment philosophy. Also Warren Buffett’s mentor, Graham is widely known as the father of value investing. His belief – that inexperienced equity investors should invest into conservatively financed companies with long history of profitable operations – is reflected in this smallcase

Value and Momentum

This smallcase includes stocks which are undervalued compared to ther industry peers, however have been attracting attention off late as evidenced by their recent stock price movements. These stocks have also earned higher than expected profits during the latest reported period

Sustainable Earnings

This smallcase consists of companies which have been recording higher sales and earnings, increasing their cash flows but are trading at lower levels compared to their peers