NJ Value Factor

Value Factor

Paying too much for your stocks? Consider the Value Factor.

The name Benjamin Graham is synonymous with value investing. Mr. Graham and co-author David Dodd released the influential book “Security Analysis” in 1934. (Graham & Dodd, 2008). This book provided a formula to calculate a company's intrinsic value based on its long-term growth potential and Earnings Per Share (EPS). And while this formula was improved upon in his follow-up book, "The Intelligent Investor" (Graham, 2013), which was published in 1974, its fundamental principles have remained the same for almost a century.

Value Investing

Value investing's fundamental tenet still revolves around buying stocks whose intrinsic value is higher than their current market price. However, its effective application depends on also being able to predict a company’s growth rate accurately and as a result, the exact formula isn’t commonly used in factor investing. Instead, factor investing focuses on Price to Book Value (P/B), Price to Sales (P/S), Price to Earnings (P/E), and Dividend Yield to measure value.

Value Factor Investing

Value investing is synonymous with Benjamin Graham. In 1934, Mr Graham along with co-author David Dodd, published a seminal

Value Factor Defined

Value as a factor as well as a style of investing is widely covered in academic research and literature. Some seminal work

Value Factor Measured

Index providers across the world now publish factor indexes using various definitions of the factors.

Value Factor Measured

The success of these measures has waned somewhat over time, not because

NJ Value 100 Portfolio

A combination of good value parameters, portfolio diversification and a robust weighting approach can assist in capturing the value factor

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