Value Vs Growth Stocks: A Literature Survey

Abstract : Over the years, investors have resorted to various strategies to beat the market and obtain superior gains. Value investing is one such strategy. The principal objective of value investing is to find undervalued stocks and invest in them with the hopes of them eventually rising to their potential value. The undervalued stocks can be identified by analysing the company’s fundamentals. Moreover, a carefully carried out analysis of the company’s fundamentals can lead to the investor ending up with two different types of stocks i.e. value stocks and growth stocks. This paper examines the literature on the comparative performance of value and growth stocks. Evidence suggests that though there is a consensus among the researchers regarding the outperformance of growth stocks by value stocks there remains controversy regarding its underlying reasons.