Value Investing refers to the philosophy or act of buying stocks that are fundamentally sound, and preferably to buy the stocks below its fair value price.  There are various parameters that Value Investors use to determine that a company is both sound and the stock price is undervalued. For the Value Investor, perhaps more than any other style of investor, is most concerned with the business and its fundamentals than other influences on the stock’s price. Fundamentals, such as earnings growth, cash flow, and book value are critical. When the Value Investor determines that the fundamentals are sound, and the stock is trading at a price below its fair value, he or she knows that this is a potential investment. The assumption is that the market has erroneously undervalued the stock. On the other hand, when the market recognised that mistake, the stock’s price will increase towards the fair ......