Gmo Value Investing

1440 Words Oct 15th, 2012 6 Pages
Gmo: the Value Versus Growth Dilemma
Ferret out – reveal
Laggard

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GMO: The Value Versus Growth Dilemma |
1. What is value investing? What is its rationale? What are GMO’s main arguments in favor of value investing?
Value investing is a way of investing in company stocks that are considered either undervalued or out-of-favor by the market. In other word, a value investment is one where the intrinsic value of the stock is not accurately reflected in the current market valuation. The underlying reason of too much decreasing in the stock price is that the company may be losing market shares or even in trouble due to market’s panic attributed to negative rumors as well as having management problems. Since the market price
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chemicals, consumer products | -Internet and emerging technology |
Dividend Policy | -Pay out dividend to shareholders in profitable period | -100% plowback to reinvest in the business |
Book-to-market ratio | -High | -Low |
Price-to-earnings ratio | -Low | -High |
Merits |

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