Undervalued stocks trade below their intrinsic value due to market factors or setbacks. They offer potential gains with strong financials but require research and patience.
For example, an undervalued stock may trade at ₹100 despite a ₹200 book value, strong profits, and low debt, often due to temporary industry issues or market oversight.
Undervalued stocks offer potential for price appreciation, dividend income, lower downside risk, and high returns as they correct to their true value over time.
Undervalued stocks may stay low for a long, tying up capital & posing risks if company issues persist, leading to delayed gains or potential losses in volatile markets.
To invest in undervalued stocks, research top performers, assess risk, analyze stocks, open a demat account & invest in shortlisted stocks & monitor them regularly.