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Definition of 'Large-Value Stock'
A type of large-cap stock investment where the intrinsic value of the company's stock is greater than the stock's market value. The stock's intrinsic value can be determined by using a valuation model such as discounted cash flow and multiples.
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Investopedia explains 'Large-Value Stock'
A stock's market value can fall below its intrinsic value for a number of reasons.
For example, if a company seeks Chapter 11 bankruptcy protection, many shareholders could become concerned that the company will go bankrupt, and therefore sell their stock. If the company has enough assets to pay all of its liabilities, then there will be intrinsic value left in the company's stock. This value may be greater than the stock's market value, which results in a large-value-stock investing opportunity.
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Valuing firms in this sector can seem like a black art, but there is a systematic way to pin a price on potential.
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Learn about per share data, price/book value ratio, price/cash flow ratio, price/earnings ratio, price/sales ratio, dividend yield and the enterprise multiple.
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Take a look at how this effective ratio can be influenced by certain critical factors.
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