Business and Personal Finance Dictionary

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• UNDERVALUATION
  
  Any stock that trades at a lower price than the issuing company's reputation, earnings outlook, or financial situation would seem to merit is considered undervalued, or what is known as a value stock. Undervaluation may occur when a company loses market appeal. Some investors concentrate on identifying and investing in undervalued stocks, drawn by their bargain prices. However, there's no way to be sure when, if ever, the price will increase enough to justify the purchase.
  
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