Investors are constantly on the search for value. The word “value” means different things to different people, but the ultimate goal of value investors is to enter into stocks that have the highest potential for price gains.
When looking for value, sometimes you have to accept that the best companies in the world are not always the best values. Analysts that follow stocks typically put a price target on shares, and by looking at the average price target, you can start to get a general idea of whether or not the smart money believes there is upside potential in the stock.
Analysts are not always right, so you have to always do your own homework, and decide whether or not you see value in the stock.
Pay attention to a stocks price-to-earnings ratio, future earnings growth estimates, and combine them with analysts’ average price, and you can begin to narrow down the overall stock universe to a group of stocks with amazing upside potential.