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What Is Intrinsic Value? Definition, Formula, and Applications

Published by
The Street

By TheStreet Staff What Is Intrinsic Value? Who Uses It?A value investor is always looking for that diamond in the rough company that, for whatever reason, is currently trading below its true worth, or intrinsic value. Their goal is to establish a position and build upon it over time. The theory is, when the tide turns and the company’s merits are finally recognized, be it through earnings reports or other valuations, its asset price will rise, and the smart investor will be rewarded. But how can you tell what a company is worth? All too often, market prices are prone to speculation and emotio…

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