So what is Value Investing?
In general, Value investing is described as paying 50 cents for a business worth $1. As per Wikipedia, Value investing is an investment paradigm that derives from the ideas on investment and speculation that Ben Graham & David Dodd began teaching at Columbia Business School in 1928 and subsequently developed in their 1934 text Security Analysis. Although value investing has taken many forms since its inception, it generally involves buying securities whose shares appear underpriced by some form(s) of fundamental analysis. As examples, such securities may be stock in public companies that trade at discounts to book value or tangible book value, have high dividend yields, have low price-to-earning multiples or have low price-to-book ratios.
Some people confuse value investing with buying stocks whose absolute price is low. Cheap stocks in the case of value investing means that the shares are under valued when you looking at metrics such as P/E multiple or P/free cash flow multiple etc.