DEFINITION of 'Fully Valued'

A stock whose price analysts believe reflects the market's recognition of the company's underlying fundamental earnings power and therefore is unlikely to rise further in price. If the stock goes up from that price, it is called overvalued. If the stock goes down, it is termed undervalued.

BREAKING DOWN 'Fully Valued'

Fully valued stock belongs to companies that have disciplined plans for achieving dramatic long-term growth in both profits and revenues. Such companies must also have inherent qualities that make it difficult for new entrants into that business to share in such growth. Thus, investors who believe they are holding fully valued stock should hold it until either there has been a fundamental change in the company's nature or it has grown to a point where it will no longer be growing at a faster rate than the economy as a whole.

RELATED TERMS
  1. Overvalued

    A stock with a current price that is not justified by its earnings ...
  2. Value Stock

    A stock that tends to trade at a lower price relative to it's ...
  3. Undervalued

    A financial security or other type of investment that is selling ...
  4. Stock Market Capitalization To ...

    A ratio used to determine whether an overall market is undervalued ...
  5. Stock Market

    The market in which shares of publicly held companies are issued ...
  6. Growth Stock

    Shares in a company whose earnings are expected to grow at an ...
Related Articles
  1. Investing

    Benefits and Risk of Growth Stock

    A growth stock is a share in a company whose earnings and sales are growing faster than those of most other companies.
  2. Investing

    Finding Solid Buy-And-Hold Stocks

    Find out how to look at the big picture - even when the market's short-term outlook is less than rosy.
  3. Investing

    5 Tips On When To Buy Your Stock

    Here are some ideas to help you identify stocks that have a good chance at making you money.
  4. Investing

    Value or Growth Stocks: Which is Best?

    The answer to the age-old growth versus value debate depends on a number of factors. Here's what to consider.
  5. Investing

    How The Stock Market Works

    When you buy a stock, you buy a piece of a company.
  6. Investing

    What Are A Stock's "Fundamentals"?

    The investing world loves to talk about fundamentals, but do you know what it means?
  7. Investing

    4 Signs Your Value Stock May Be Overvalued

    Value investing can make you money, but you have to look for traps. Overvalued stocks often correct, which means investors need to know when to get out.
RELATED FAQS
  1. When does a growth stock turn into a value opportunity?

    Learn how fundamental analysts use valuation measures, such as the price-to-earnings ratio, to identify when a growth stock ... Read Answer >>
  2. What is "hammering"?

    "Hammering" is a situation where large sale orders are placed against a particular stock because investors believe that the ... Read Answer >>
  3. If the intrinsic value of a stock is significantly lower than the market price, should ...

    Discover how the intrinsic value and market price of a stock are related and why a stock that appears overvalued may still ... Read Answer >>
  4. What are some common traits of undervalued stocks?

    There are a few basic factors found in companies that are worth more than their current stock price. Read Answer >>
Hot Definitions
  1. IRS Publication 970

    A document published by the Internal Revenue Service (IRS) that provides information on tax benefits available to students ...
  2. Federal Direct Loan Program

    A program that provides low-interest loans to postsecondary students and their parents. The William D. Ford Federal Direct ...
  3. Cash Flow

    The net amount of cash and cash-equivalents moving into and out of a business. Positive cash flow indicates that a company's ...
  4. PLUS Loan

    A low-cost student loan offered to parents of students currently enrolled in post-secondary education. With a PLUS Loan, ...
  5. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  6. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
Trading Center