Value investing involves buying a stock that you think is undervalued and could possibly rise in value in the future, and holding it for a long period of time. This gives the company a chance to grow, manage its cash flow and provide promising balance sheets for the future, which are all aspects of fundamental analysis.
Share prices often fluctuate after a news report or balance sheet is released, which can affect market sentiment for a particular company. Whereas short-term traders focus on these movements and aim to profit from small price discrepancies, value investors focus on longer-term trends and company fundamentals. They ignore most aspects of technical analysis and instead pick stocks based on quality and potential for the future.
Value investors tend to wait until a share’s price is below its intrinsic value before buying. This is essentially to get it at ‘discount’ price.