Generally speaking, value stocks are stocks which have little in the way of earnings
growth (comparatively speaking), but can be good investments if bought at a significant
discount to intrinsic value. That is the long and short of it, at least in my view. When
you expand the definition, you can find that even mega growth stocks like Cisco can be
considered "value" if the PE or the PEG is low enough, or if they have cash reserves so
high that such a determination isn't unwarranted. Also, Coca Cola in the early 1980s was a
growth stock, with upper teen growth, even though it sold at a signifcant discount to its
intrinsic value, and its PE was absurdly low for its growth.

that does help,because I have my own theory and what I what to accomplish. With the funds
I have available now I look for low priced stock with a good company (more shares). I am
more interested in the sector and company than what type of investment it is. For
instance we are at war, being former military I know for a fact that the gov will have to
restock. Everything from bandaides to bombs. So I have been lookin for lwr priced stocks
with military connections and bought in on PPA. I have taken bits and pieces from alot of
different experts and trying to build my prtfolio fm there. but it helps to know the
language. Thanks

I agree with James' definition of value with respect to the first example of real estate.
You see the same thing with companies like MO, ASD and TYC spinoff of businesses or
breaking up their divisions into individual companies to unlock the value. That has
nothing to do with valuation metrics like P/E or PEG. MO trades at almost 2 times its
growth rate based on 2008 earnings and more than 2 times on 2007. The company also has
lots of cash and generates a lot of cash flow, consistently increasing dividend and a
strong buyback. So although its not cheap on earnings its still undervalued. You have to
try to avoid the value traps where the company sells at a low P/E, doesn't have a lot of
growth and might even be looking at detereorating earnings. Cyclicals at their earnings
peak have those characterisitcs. A good example of one now is DOW.

No matter how often I read such definitions, a new perspective is always interesting. This
one was particularly easy to get a handle on.

Its not a dumb question because there's no easy answer. Everyone has different definitions
of both. Value stocks are usually thought of as "cheap" stocks. In other words, they trade
near the value of assets they own. If they own $100 worth of real estate and the stock
trades at $90 then its considered cheap. Or if they make $10 a year and the stock trades
for $50, then its cheap, even if its not growing.

A growth stock is usually a stock thats not cheap but is growing fast. If a stock make $1
per share but the stock is at $100, then its not cheap. But its considered a growth stock
(in this case) if it had, say, 200% growth in revenues and earnings over the past year.
The best thing in the world is to find growth and value at the same time. Sometimes people
say what they want is "GARP" - Growth At a Reasonable Price. In Cramer's book, for
instance, he says he likes to find stocks with a PEG < 2. In other words, take the P/E,
which is price divided by earnings, and divide by growth. So, for instance, in the above
example of a stock that made $1 per share. The P/E is 100. But the growth rate is 200. So
100/200 = 0.5 so this might be considered GARP.

dumb question but what is the true meaning of value stock, income , and growth? I have my
own thoughts and some of it is easy to figure out, but I have read iit in different ways.