deep value

Definition

Deep Value
Deep value investing is a strategy aimed at uncovering stocks trading far below their intrinsic worth. Investors employing this method search for companies with extremely low market prices relative to fundamental indicators such as book value, earnings, or cash flow. These stocks often suffer from temporary setbacks, market neglect, or pessimism that drives prices down excessively. Deep value investors rely on rigorous analysis to identify severely discounted opportunities, expecting that corrective forces will eventually realign the price with the true value. This approach demands significant patience and tolerance for short-term volatility, as recovery might take time. The principle focusses on buying low and capturing substantial upside when the market overreacts to short-term negative news.

See also