Value Investing

[engineering]

You throw out Graham,but have you read the Intelligent Investor?? Are you familiar with the Graham formula? Do you understand the concept of value investing,discount to Intrinsic and the value investing approach??

This. Please actually read Graham. Then talk value investing.

I look at everything I buy from a value perspective. Graham has some key tests for what is a value. You need to consider a variety of factors besides p/e such as debt.

Value investing is specifically not just chasing price around. It requires actually looking at a company's financial statements.
I really wish there was more discussion of actual value investing here.

 

[Forexer Guru]

How do you define a Value stock??

Now, folks, you're not helping me when you start asking such questions.

I know my strategy may sound contradictory (so just ignore it), but let me explain how I understand value stocks, and then you can correct me if needed.

A value stock is an asset or type of stock that is considered undervalued in relation to its intrinsic or fundamental value.

Let me use GPI as an example. Based on Group 1 Automotive's latest financial reports and stock price, the company's current price-to-earnings ratio is around 6.27. I calculate the P/E Ratio by dividing the market price of a share by the earnings per share.

Read more here: https://www.marketbeat.com/stocks/NYSE/GPI/earnings/

Find more information on zacks.com to see how they categorize overvalued and undervalued assets.

So, the question is: Is my definition right or wrong?

 

[Forexer Guru]

In the case of GPI, I found out it's undervalued. However, I don't expect a significant uptrend over the next three or four days. While GPI is a value stock and may be suitable for long-term traders, it's not ideal for short-term traders like me. In a way, I sound contradictory, but this is what I mean: I am interested in a sudden upward movement that should occur within 3 or 4 days. If it doesn't happen, I have to close my position. The asset that is traded should be rated undervalued based on the specific metrics I pointed out above

I will get at least 3 good examples that I can use to explain my strategy before end of March

 

[Forexer Guru]

I really wish there was more discussion of actual value investing here

You are talking man!

I want to hear more from people with this knowledge.

 

[Forexer Guru]

Intelligent Investor

I actually read this book by Graham.

However, I'm not copy-pasting what I've learned because it may not work.

 

[taowave]

Neither right nor wrong,but P/E as a stand alone measure can be very misleading..
GAAP vs Non GAAP,Comparitive to Industry, Earnings Growth,and for shits and giggles where does current P/E fall in the 5 year range..

Fwiw,I would probably ride with EV/EBITDA...

You realise that ZACKs bullshit claim to fame is estimates revision

 

[Forexer Guru]

You realise that ZACKs bullshit claim to fame is estimates revisio

You've got a point that makes a lot of sense to me. Most of the time, I use financial statements and apart from zacks in use others like TipRanks, Nasdaq, and MarketScreener to confirm my findings. I fully agree that P/E, as a standalone measure, can be very misleading

 

[lindq]

You are talking man!

I want to hear more from people with this knowledge.

Your strategy of finding short term entry points on otherwise solid companies can be a valid approach, so long as you can define a small universe of equities that fit your criteria, and can, through testing, define valid entry and exit points.

This is also the approach generally used by Jim Simons in his early years. You may begin to find some success in about 5 years, if you're lucky, and very good.

You might want to start by using simple criteria such as EPS, EPS growth, market cap, volume, beta. Create a list of candidates, then run backtests looking for deviations in price from an established mean or average. You may want to use daily bars for setups, and intraday for entry opportunities.

You may also try not being a smartass on this site when people take the time to reply to you.

(Trading is risky. Do not trade with funds you can't afford to lose.)

 

[Forexer Guru]

T

Your strategy of finding short term entry points on otherwise solid companies can be a valid approach, so long as you can define a small universe of equities that fit your criteria, and can, through testing, define valid entry and exit points.

This is also the approach generally used by Jim Simons in his early years. You may begin to find some success in about 5 years, if you're lucky, and very good.

You might want to start by using simple criteria such as EPS, EPS growth, market cap, volume, beta. Create a list of candidates, then run backtests looking for deviations in price from an established mean or average. You may want to use daily bars for setups, and intraday for entry opportunities.

You may also try not being a smartass on this site when people take the time to reply to you.

Thanks for the advice. I will take it seriously. This will be my last post here. I will only respond with likes as folks help me improve my trading

 

[Cabin1111]

OK, I'm going to say it...If nobody else will. You want to trade value stocks (investing), on margin?? Do I have this correct?

Also you are trying to find the correct entry point on a value stock...It's nice, but not realistic.

When Google and Amazon dropped below $100. a share, I saw value. Later, I entered in at what I felt was a good position. The stocks dropped another 10% over the next few months...Then did the slow and steady rise.

Just thinking, the margin could eat you alive...