A value stock is a stock that tends to trade at a cheaper price relative to its fundamentals, such as dividends, profits, or sales, and hence appeals to value investors. In other terms, a value stock is a security that trades at a lower price than the company’s performance would suggest. Investors in value stocks seek to profit from market inefficiencies, as the underlying equity’s price may not correspond to the company’s performance. One of the characteristics of value investing stocks is the high dividend yield (due to underperforming security), a low price to earnings ratio. Another important feature of value stocks is there is lesser fluctuations in price both during market highs and lows.