Stocks Intermediate:
Value Stocks
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1.
Which of the following factors is least likely to indicate a value stock?
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A new management team
A low price-to-book-value
A low book value
New product patent approvals
A low book value. A low book value indicates low net assets, which could have a negative impact on future earnings growth.
2.
Which of the following is the least likely internal factor to trigger a rise in the price of a value stock?
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A new president restructures the executive management team.
Production employees strike for higher wages.
The board of directors announces the sale of an unprofitable subsidiary.
The company announces a new plant opening.
Production employees strike for higher wages. Unless this problem can be solved quickly, it may threaten the companys prospects for growth.
3.
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
False
True. There are certain conditions under which stocks may be undervalued.
4.
You can often find value stocks during a bear market but seldom during a bull market.
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True
False
False. You can find value stocks during either a bear market or a bull market.
5.
Investors are less likely to find value stocks in non-cyclical industries than in cyclical ones.
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True
False
True. Investors are less likely to find value stocks in stable industries that experience fewer highs and lows.
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