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Originally Posted by moncton golden flames
Just getting into investing and wondering how to find undervalued stocks?
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It's a big question you have. It depends what your metric is for measuring the "undervalueness" of a stock. If you want to look for stocks with the highest p/e ratios or the most earnings per share or the highest short float or most insider buying, or analyst upgrades, you can do all of that at
www.finviz.com. But you'll be frustrated with the results. What you're really looking for is investor perception of value, not actual value. And there's really no measure for that.
Tesla didn't make a cent during its rise from $40 to $300. But investors perceived great value in its potential. When you look at the stocks that made the greatest gains over the last year you generally see stocks that bumbled along with low volatility until something surprised the market that fundamentally changed the way investors perceived that company's ability to make money. A positive drug result for example. A merger, purchase or takeover. New business contracts. Those companies with the biggest yearly gains were not undervalued when the fundamental change happened.
But whatever you decide you're looking for, you need a way to test your hypothesis, back test for results, and move forward with a way to find stocks that have a positive expected result. Finviz will get you started. Finding surprises in the market is a bit harder but by no means impossible.