Value, Size & Quality

Value buys cheap stocks, size favors small companies and quality favors strong businesses. Here is how each works, how long they can lag and what our price data shows about small caps.

Value

Value investing buys stocks that are cheap relative to earnings, book value or cash flow. Historically, cheap stocks beat expensive ones over long periods, but value suffered a long drought in the 2010s as fast-growing technology companies dominated. Cheap stocks can stay cheap, or get cheaper, when the business is truly declining.

Value investors compare price with earnings and other fundamentals.

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