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value investing Archives

Finding value is all about buying something at a discount to what it’s actually worth. The same is true of value investing.

Sometimes factors can cause a stock to get beaten down to the point of being undervalued. Value investing is about finding stocks that are worth more than their current share price.

Investment legends like Sir John Templeton, Benjamin Graham and Warren Buffett realized decades before behavioral finance became a respected academic discipline that systematic psychological errors tend to create market inefficiencies. Templeton, Graham and Buffett reasoned that herding behavior (including momentum traders and short-term speculators that chase price trends) and overreaction bias (the tendency of people to overreact to bad news) are strong forces in the market that can push stocks far below their fair value.

Based on these observations, many of the world’s greatest investors look for stocks that are beaten down by the market due to bad news or negative rumors. Benjamin Graham, the father of value investing, constantly searched for companies that once fetched sky-high valuations but that crashed when the companies were unable to deliver on investors’ expectations.

Warren Buffett famously said, “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”

Value investing is about recognizing opportunities and spotting deep discounts. One way some investors measure a company’s value is its price-to-earnings ratio, or P/E. But P/E is a very simplistic measure of a stock’s value. Experts dig deeper, examining a company’s sales, cash flow, dividend, book value, debt levels, historical valuation patterns and more to determine if a stock is undervalued.

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Cabot Turnaround Letter Weekly Update

February 26, 2021|From Cabot Turnaround Letter|by Bruce Kaser|Value Investing

Today’s note includes earnings updates, ratings changes, the podcast and the Catalyst Report.
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Cabot Small-Cap Confidential Weekly Update

February 25, 2021|From Cabot Small-Cap Confidential|by Tyler Laundon|Small Cap Stocks

The big picture for the market is that the uptrend is intact but under the surface we’re continuing to see pockets of turbulence. While the S&P 500 is just 2% off its high from last week and the S&P 600 Small Cap Index a..
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Cabot Undervalued Stocks Advisor Weekly Update

February 24, 2021|From Cabot Undervalued Stocks Advisor|by Bruce Kaser|Value Investing

The stock market is clearly accelerating the “reopening” trade. Small cap and cyclical stocks as well as commodity prices are surging, interest rates continue to tick up (the 10-year Treasury yield is now 1.38%, up from 0.92% at year-end), and novel financial vehicles SPACs,...
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Cabot Undervalued Stocks Advisor Special Bulletin

February 23, 2021|From Cabot Undervalued Stocks Advisor|by Bruce Kaser|Value Investing

With the shares continuing to surge past our recently raised 65 price target, and now being priced at a premium to even our upgraded valuation metrics
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Cabot Turnaround Letter Weekly Update

February 19, 2021|From Cabot Turnaround Letter|by Bruce Kaser|Value Investing

Today’s note includes earnings updates, ratings changes and the podcast.
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Cabot Small-Cap Confidential Weekly Update

February 18, 2021|From Cabot Small-Cap Confidential|by Tyler Laundon|Small Cap Stocks

As mentioned last week, today’s Weekly Update will be an abbreviated version owing to the short work week and because of family commitments as our kids are out of school and I am solo parenting, making free writing time hard to come by. said,...
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2 Rare Semiconductor Value Stocks

2 Rare Semiconductor Value Stocks

From the issue of |by Bruce Kaser|Value Investing

Chip stocks aren't a place investors can typically find value. These semiconductor value stocks could be rare exceptions.
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Cabot Undervalued Stocks Advisor Weekly Update

February 17, 2021|From Cabot Undervalued Stocks Advisor|by Bruce Kaser|Value Investing

With the stock market regularly surging to record highs, it may seem like an unusual time to focus on valuation. After all, many stocks are remarkably expensive on traditional measures, and even somewhat lofty on non-traditional measures. But valuation still matters, especially if market...
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Cabot Turnaround Letter Weekly Update

February 12, 2021|From Cabot Turnaround Letter|by Bruce Kaser|Value Investing

Today’s note includes earnings updates, ratings changes and the podcast.
Read More

Cabot Small-Cap Confidential Weekly Update

February 11, 2021|From Cabot Small-Cap Confidential|by Tyler Laundon|Small Cap Stocks

Suffice to say we are in a bull market. Areas of it are most definitely frothy. But stepping back and thinking about where we are in a bigger cycle I continue to feel as though we are entering a more sustained economic recovery (hopefully)...
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Cabot Undervalued Stocks Advisor Weekly Update

February 10, 2021|From Cabot Undervalued Stocks Advisor|by Bruce Kaser|Value Investing

Last week, we outlined four ingredients of a market bubble that were usefully outlined in a recently published book1”and briefly described how it clearly appears that our stock market is in a bubble. These ingredients include easy trading of assets, cheap and easy rising...
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Benjamin Graham’s Seven Criteria for Picking Value Stocks

Benjamin Graham’s Seven Criteria for Picking Value Stocks

From the issue of |by Cabot Value Team|Value Investing

Benjamin Graham was the father of value investing, and these were his seven primary criteria for selecting winning value stocks.
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Cabot Turnaround Letter Weekly Update

February 5, 2021|From Cabot Turnaround Letter|by Bruce Kaser|Value Investing

Today’s note includes earnings updates, ratings changes and the podcast.
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Cabot Global Stocks Explorer Special Bulletin

February 4, 2021|From Cabot Global Stocks Explorer|by Carl Delfeld|Emerging Markets

To follow up on today’s issue and new recommendation of Fisker, Inc.
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Why Stocks Under $5 Aren’t Good Values

Why Stocks Under $5 Aren’t Good Values

From the issue of |by Chris Preston|Value Investing

There are plenty of stocks under $5, but few of them offer much value. And the distinction between cheap and low-priced is an important one.
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Cabot Turnaround Letter Weekly Update

January 29, 2021|From Cabot Turnaround Letter|by Bruce Kaser|Value Investing

Today’s note includes earnings updates, ratings changes, the podcast and the Catalyst Report.
Read More

Cabot Small-Cap Confidential Weekly Update

January 28, 2021|From Cabot Small-Cap Confidential|by Tyler Laundon|Small Cap Stocks

For some time I’ve felt that we should be bumping up the upper end of our market cap range since the market’s evolution, and rising share prices, has made for somewhat slim pickings for high growth names in the under $3 billion market range...
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Cabot Undervalued Stocks Advisor Weekly Update

January 27, 2021|From Cabot Undervalued Stocks Advisor|by Bruce Kaser|Value Investing

Intel’s recently publicized struggles with its own chip production highlight the trajectory of this story. The company has been unable to successfully transition to leading-edge manufacturing technologies, and is seriously considering outsourcing to companies like Taiwan Semiconductor. Intel has long been the industry’s in...
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Cabot Turnaround Letter Weekly Update

January 22, 2021|From Cabot Turnaround Letter|by Bruce Kaser|Value Investing

This week we had two companies reporting earnings, one reports next week, and the earnings deluge starts the following week with at least seven companies reporting.
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Cabot Global Stocks Explorer Special Bulletin

January 22, 2021|From Cabot Global Stocks Explorer|by Carl Delfeld|Emerging Markets

Based on the below press release highlighting the agreement for Australia’s Lynas to build a rare earths refinery in Texas, I recommend you sell your MP Materials (MP) position.
Read More

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