Value Hedge Fund Investment Manager | Definition

Value Hedge Fund Manager

Value Hedge Fund Investment Manager | Definition

(1) An investment manager who seeks to buy stocks that are at a discount to their "fair value" and sell them at or in excess of that value. Also called contrarians, because they see value where many other investment managers do not.

(2) An investment manager who focuses on income-producing companies and/or securities whose price is low relative to one or more valuation factors, such as earnings or book value. The low price may reflect negative sentiment toward the company, undervalued assets, or a temporary setback.

There are two substyles within this category: low P/E and yield. Low P/E value managers emphasize stocks that have below-average multiples of trailing, forecasted, or normalized earnings. In contrast, yield value managers focus on stocks with above-average dividend yields. As a result, their portfolios tend to have a larger capitalization bias and sector concentration than those of low P/E value managers.

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