How do the experienced investors employ the valued stock selection?

Abstract

Value investing is a form of investment in superb and undervalued stocks. The valued investment theory offers insights about the internal determinants of stock while the extant literature empirically has examined the external factors. Today, in that sense the aforementioned theory provided higher effectiveness in terms of investment to invest. This paper is clustered into two contents: First, the study presents the selection methods of value stocks of experienced investors in the world, including Benjamin Graham, Philip Fisher, Warren Buffett, and Peter Lynch; Second, the research presents highlights how to apply these methods into practical investment in the Vietnamese stock market. The authors perform the second content through two parts: part one, presents how to build value stocks filter by V-Score (Value Score) is based on a combination of the Guru investors' value stock selection methods and simulation ideas to build F-Score according to Piotroski (2000); and the second part shows how to apply V-Score to select the share of Hoa Phat Group (HPG) in the Vietnamese stock market. The results show that after 6 months of choosing to invest in HPG according to the V-Score, the return rate is 27.5%, equivalent to 55% / year.