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Strategy Intermediate: Value Investing

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1.
A value stock is issued by a company that _______.
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Has the resources to grow. A careful review reveals that it will likely grow in the future, even during economic downturns.
2.
Which of the following best suggests that the price of an undervalued stock may soon increase?
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A corporate takeover is imminent. An investor may expect the takeover announcement to push up the price of the undervalued stock.
3.
A value stock is one that is undervalued in the marketplace.
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True. A value stock is worth more than its current market price indicates.
4.
There are reasons why a low price-to-book ratio may not be a good thing for investors. Which of the following is not one of those reasons?
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The company is earning a high return on its assets. This is actually a good thing for investors.
5.
For value investors, which of the following would be the least helpful in evaluating a company?
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Quarterly sales. A value investor usually focuses on factors that reveal the fundamental capacity and potential of the company over the long term.