Cory Burnell

Looking at their recent track records doesn’t do much to settle the debate. As you can see from the chart below, during the past 10 years, growth stocks came out on top six times and value investing four times. Investing for Value Value investors look for bargains. That is, they attempt to find stocks that are trading below the value of the companies they represent. If they consider a stock to be underpriced, it’s an opportunity to buy; if they consider it overpriced, it’s an opportunity to sell. Once they purchase a stock, value investors seek to ride the price upward as the security returns to its “fair market” price—selling it when this price objective is reached. Most value investors use detailed analysis to identify stocks that may be undervalued. They’ll examine the company’s balance sheet, financial statements, and cash flow statements to get a clear picture of its assets, liabilities, revenues, and expenses. One of the key tools value investors use is financial ratios.