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10-10-2006, 12:00 PM
Yahoo Finance Investing Strategies
Optionetics.com
Gauging a Stocks Genuine Value
Monday October 9, 5:00 pm ET
By Jeff Neal
In the world of stocks, the process of seeking out stocks that are going for less than their worth is called value investing. The key objective of value investing is being able to perceive when a stock’s current price does not fully reflect the value of its assets. Those assets might include real estate, brand names, oil reserves, patented technology or even cash or stocks in other companies.
Value investors make money by purchasing equities when the stock’s assets are worth more than the stock’s price and selling when the value of the assets has come to fruition. Stockowners can be paid for the genuine value of their company’s assets in a variety of ways. For instance, a company can be taken over by another company or by an opportunist at a premium price because the buyer believes it can sell the assets for even more.
The company can be broken into pieces, leaving shareholders with several stocks worth more separately than they are worth as a whole. The company’s management can derive a way to make the formerly underused asset more productive, which would generate profits to energize the stock price. Or investors can finally realize the value of the company’s assets and the stock price will rise to reflect that changed perception.
complete article here... (http://us.rd.yahoo.com/finance/news/rss/story/*http://biz.yahoo.com/opt/061009/opt_15845.html?.v=1)
Optionetics.com
Gauging a Stocks Genuine Value
Monday October 9, 5:00 pm ET
By Jeff Neal
In the world of stocks, the process of seeking out stocks that are going for less than their worth is called value investing. The key objective of value investing is being able to perceive when a stock’s current price does not fully reflect the value of its assets. Those assets might include real estate, brand names, oil reserves, patented technology or even cash or stocks in other companies.
Value investors make money by purchasing equities when the stock’s assets are worth more than the stock’s price and selling when the value of the assets has come to fruition. Stockowners can be paid for the genuine value of their company’s assets in a variety of ways. For instance, a company can be taken over by another company or by an opportunist at a premium price because the buyer believes it can sell the assets for even more.
The company can be broken into pieces, leaving shareholders with several stocks worth more separately than they are worth as a whole. The company’s management can derive a way to make the formerly underused asset more productive, which would generate profits to energize the stock price. Or investors can finally realize the value of the company’s assets and the stock price will rise to reflect that changed perception.
complete article here... (http://us.rd.yahoo.com/finance/news/rss/story/*http://biz.yahoo.com/opt/061009/opt_15845.html?.v=1)