Image source: Getty Images
One of the best things about value stocks is that they can spring into action if good news hits.
However, that is balanced by the patience that investors typically need. Sometimes companies with low valuations are forgotten and overlooked for years.
Plus, there's always the risk that an already cheap stock will continue to get cheaper. Therefore, it is possible to end up holding stocks that decline over days, weeks, and even years.
Sometimes it's worth waiting and waiting.
It's enough to make even the most stern value investors cry. But the waiting game can be worth it. An old stock market saying goes something like: “The patient's money often wins in the end.”
This agrees with another expression: “Scared money often loses.” Therefore, a value investor who stops waiting or cuts a loss might sell just before a stock improves. That would be another reason to cry over beer.
Therefore, value investing requires skill, faith, luck and a certain willingness. It's not for the faint hearted and there is a higher risk of drinking watered down beer!
However, striking success has recently been achieved: green core (LSE: GNC). The company operates as an international manufacturer of private label prepared foods for supermarkets and others.
It is not an exciting business nor a stimulating sector. Perhaps that's why shares stalled near their year-long lows through most of 2023.
There was plenty of time for investors to buy the stock, and a long wait for those who bought in late 2022, when it first bottomed.
However, in the end, Greencore began issuing updates saying that trading was ahead of lackluster market expectations. He then kept repeating the trick at regular intervals.
The stock took off and began a long rally as earnings and the depressed valuation improved. With the share price near 199p, it is around 110% higher than at the beginning of 2024.
So that value investment worked for some. But what about the opportunities for 2025?
Could these zeroes be next year's heroes?
Right now, I think several stocks are unloved. For example, international home improvement retailer Kingfisher It recently issued a profit warning and the stock price fell.
However, the dividend looks safe for now and City analysts expect better profits next year. However, the sector is cyclical and those analysts could be wrong, leading to further weakness ahead for the stock.
instagram Design It is another business that has had bad luck and now has a low valuation. But any good earnings news can send stocks back up.
However, nothing is certain and the risk is that the company is just another one operating in a cyclical sector.
house builder Vistry It is also cyclical and the share price plummeted during the fall. But demand for housing remains strong. So it's easy to imagine the company getting its time in the sun again.
These three businesses strike me as worthy of further investigation and consideration by investors now.
