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As you look for stocks on the market, you might have a strategy for finding cheaper stocks. However, it is even more important to think about various underlying factors of a stock. Sometimes a stock’s value is not as great as the official total says it is. That is, the stock is overvalued.
At the same time, a company is doing very well but the price of the stock does not reflect this. Would you want to buy a stock for $150 per share only to find out later on that another stock with a better prospectus was available for $30 at the same time? You would probably prefer to take the latter if you knew what it had to offer at the time.
You will have to look at several points relating to how well a stock is performing so you can get the most out of an investment. This chapter is all about some strategies to use to find out if a stock is overvalued or undervalued.
