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Investing basics: Value investing principles we all must adhere to

Value stocks are also the ones with a moat that is not yet recognized by the market. A company may have a unique advantage like a vast distribution network, cash cow products and disruptive new ideas

Value investing principles we all must adhere to
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Having reversed its weak order inflow and profit growth days, analysts see L&T stock as the major beneficiary of revival in infrastructure cycle

Amarjeet Maurya Mumbai
Investors and analysts often look at value investing in contradistinction to growth investing. Quite often, they converge; which means a growth stock may also be a value stock if it is appropriately priced. It is common for people to mistake low P/E stocks to be value stocks but that may be a slightly misleading approach to value investing. Normally value stocks are those that offer a substantial margin of safety. 

The margin of safety of a stock is defined by the extent to which the market price of the stock is below the intrinsic value of the stock. Wider the margin

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First Published: Jan 29 2019 | 6:28 AM IST

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