Undervalued stock

An undervalued stock is defined as a stock that is selling at a price significantly below what is assumed to be its intrinsic value. For example, if a stock is selling for $50, but can be determined to be worth $100 based on predictable future cash flows, then it is an undervalued stock. Numerous popular books discuss undervalued stocks. Examples are The Intelligent Investor by Benjamin Graham, also known as “The Dean of Wall Street,” and The Warren Buffett Way by Robert Hagstrom.

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