What are Value Stocks

Value stocks are the stocks which trade at discount with respect to its peer companies as per the financial ratio multiple. The second attribute of growth and value stock is that the growth stocks will have higher financial ratios and higher pricing and the value stock will have lower financial ratio and lower market price

Answer:

PEG (i.e. price to earning ratio divided by annual EPS growth) ratio is the best parameter for choosing the value stocks. This ratio measures in terms of the value how far the current market price is justified. Lower PEG ratio signifies that the current price movement is not justified with respect to the earning growth. Hence it is a good buying opportunity for the investors.