Value investing is a long-term strategy focused on purchasing stocks that are undervalued relative to their intrinsic worth. Popularized by investors like Benjamin Graham and Warren Buffett, value investing involves identifying companies with strong fundamentals—such as earnings, cash flow, and dividends—that the market has undervalued.

Key to value investing is determining a company’s intrinsic value through fundamental analysis and buying when the stock price is below this value. The concept of a margin of safety—purchasing at a price well below the estimated intrinsic value—helps reduce risk. Value investors typically hold onto their investments long-term, waiting for the market to recognize the company's true worth.

Common tools include the Price-to-Earnings (P/E) and Price-to-Book (P/B) ratios, as well as analyzing dividend yield and debt levels. While value investing provides lower risk and steady returns, it requires patience and can be vulnerable to "value traps," where a stock remains undervalued due to underlying issues.

Famous value investors, including Warren Buffett and Benjamin Graham, have demonstrated the strategy’s potential for consistent, long-term success, making value investing a respected approach in the financial world.