Deep Value Analysis

The act of finding undervalued securities, based on their valuation multiple.

Deep value analysis consists of three main parts:

Clustered Insider Buying

Insiders often will buy more of a stock because they think that the price will rise, obviously. However, it is not enough for one or two investors to be buying. Keep an eye out for 3-5 insiders buying 200,000$+

Credit Risk

Bonds are given a rating based on how safe they are, the more safe, the lower the interest payment or yield will be. This means that it is inversely correlated with the price. You can google (Company ticker) credit rating in order to find out the rating. This is often the case for publicly traded debt.

Operating Performance

Share price can be effected due to external factors rather than poor decisions from management. Ask yourself: why is there low valuation? What was happening in the world when it was doing better before? Does this event happen in cycles? What is managements' plan to survive? Do other people think this will work?