Value investing
Value investing is buying a for less than what the underlying business is worth, on the belief that the market has mispriced it and the price will eventually catch up to reality. A "value play" is shorthand for a specific someone believes fits that description right now.
The gap between a 's price and its estimated real worth is what Benjamin Graham, the investor who popularized the strategy, called the . Investors look for that gap by comparing a company's , assets, and cash flow to its current price, using tools like the or a , rather than by guessing at a .
Cheap is not the same as underpriced. A can trade at a low multiple because the market has correctly priced in a real, structural problem, a shrinking business, a broken , mounting debt. Value investing only works when the discount reflects fear or inattention rather than a fair read of a weaker business, which is why the analysis, not just the low price, is the actual work.