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You can identify value stocks by their relatively low price ratios (which include the price-to-earnings ratio (P/E ratio), price-to-sales ratio, and price-to-book value ratio), lower-than-average growth rates, and PEG (price-to-earnings growth) less than 1, which means that the company’s growth potential isn’t yet reflected in its price. Examples of value stocks (at the time of this writing) include American Express (AXP), AT&T (T), and Tyson Foods (TSN). Keep in mind that once these stocks catch fire they may lose their value status as demand drives prices up.
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Michele Cagan (Stock Market 101: From Bull and Bear Markets to Dividends, Shares, and Margins—Your Essential Guide to the Stock Market (Adams 101 Series))