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Value Investing

Value investing (low debt, high PE/ PBV)

Value investing is an investment approach that seeks to profit from undervalued stocks. Value investors aim to determine the intrinsic value of a stock and then buy it below that value. Value investing uses tools like the PE and PB to value a stock. To find the intrinsic value of a company, deep fundamental analysis is required which demands a good understanding of the business.

Marketcap:
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EXPORT
CompanyCMP
(Rs)
P/E
(x)
P/BV
(x)
D/E
(Curr FY, x)
MCap
(Rs m)
RoE
(5 yrs, Avg. %)
Profit CAGR
(3 yrs, %)
ONGC275.76.81.10.53,467,75412.3%42.0%
HINDALCO613.714.71.40.71,379,11710.5%38.9%

* We show NM where the values are negative

Disclaimer: This is for information purposes only. These are not stock recommendations and should not be treated as such. Learn more about our recommendation services here... Also note that these screeners are based only on numbers. There is no screening for management quality.

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Which are the best value investing stocks in India right now?

As per Equitymaster's Stock Screener, here is a list of the best value investing stocks in India right now...


These companies have been ranked as per their PE (Price to Earnings) ratio and PB (Price to Book Value) ratio. The lower the ratios, the more undervalued the stock is.

They also have low debt and high return on equity.

Note that, there are various other parameters you should take into account before investing in any company such as promoter holding etc. Sustained research must not be compromised despite the positive odds.

What is value investing?

Value investing is an investment approach that allows one to profit from undervalued stocks. It is based on the idea that each stock has an intrinsic value, i.e. what it is truly worth.

Through fundamental analysis of a company, we can determine what this intrinsic value is.

If the intrinsic value is higher than the actual stock price of the company, then the stock offers an investment opportunity. It's like buying a Rs 100 note, for Rs 80.

Conversely, if the intrinsic value is lower than the current market price, then the stock is 'over valued' and should be avoided. Think a Rs 100 note selling for Rs 120.

Can value investing make you rich?

Yes. However, note that value investing is not a get-rich-quick scheme, it's a buy-and-hold strategy.

Once you manage to find a fundamentally strong company that is priced lower than its actual value, you must buy and hold for a long term.

This will help you ride out the volatility in stock prices and avoid the pitfalls that come with trying to time the market.

How does Warren Buffet value stocks?

Warren Buffett evaluates stocks based on his value investing philosophy.

Buffett looks for companies that provide a good return on equity over many years, particularly when compared to rival companies in the same industry. He also reviews a company's profit margins to ensure they are healthy and growing.

Besides this, he focuses on companies that provide a unique product or service that gives them a competitive advantage. He also focuses on companies that are undervalued, ie. have a margin of safety.

Here's a list of Indian stocks that could qualify per Warren Buffett's criteria...

Does value investing still work?

Value investing continues to be a reliable way for investors to make healthy returns.

Investors just have to be patient with their investments as value investing may not work well in all phases of the market.

Is there any alternative to value investing to make money?

There are many alternatives to value investing. However, this will depend on your risk appetite, corpus amount, time horizon, etc.

One of the popular alternatives is growth investing, where you invest in high growth stocks, even if they are expensive. This is a more high-risk strategy compared to value investing.

Therefore, investors expect to earn substantial capital gains as a result of strong growth in the underlying company.

Here, you can check out the list of the fastest growing stocks in India and the valuations they trade at....

Apart from growth investing, another popular alternative is dividend investing where you generate cash income from stocks through dividends. This income is in addition to the growth in your portfolio as the stocks gain value.

High-dividend stocks don't lose their value even there is a sudden market crash or decline due to a particular event. As a result, they are safe compared to other growth stocks.

Check out the list of the high dividend stocks in India here and their yields.

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