Stocks Intermediate: Value Stocks

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1.
While all stocks might be undervalued at some time, investors watch for certain conditions that can help them find value stocks.
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True. There are certain conditions under which stocks may be undervalued.
2.
A stock issued by a company with a large debt load is likely to be a value stock.
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False. A stock issued by a company with a large debt load may lack the resources to increase future earnings.
3.
Value investors aim to buy several months after a turnaround in a stocks performance.
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False. Value investors aim to buy right before an expected turnaround in a value stocks performance.
4.
Which of the following factors is least likely to indicate a value stock?
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A low book value. A low book value indicates low net assets, which could have a negative impact on future earnings growth.
5.
Which of the following is an example of a non-cyclical industry?
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Health care. This industry tends to react less to economic changes than many cyclical industries do.