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.
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.
4.
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.
5.
Of the following, the most likely external factor to trigger an expected turnaround in a value stocks performance is that _______.
Choose wisely. There is only one correct answer.
A respected economic forecaster predicts a boom in the companys industry. This would almost certainly benefit the company.