Value investors want to buy stocks for less than they're worth, like buying $100 bills for $80. Even high-quality companies with strong fundamentals see share prices fall when the overall stock market drops, and that's when value investors go shopping.
Here's an overview of some excellent beginner-friendly value stocks and key concepts that value investors should know.
Top value stocks to consider
| Name and ticker | Market cap | Dividend yield | Industry |
|---|---|---|---|
| Berkshire Hathaway (NYSE:BRKB) | $1.1 trillion | 0.00% | Diversified Financial Services |
| Target (NYSE:TGT) | $51.3 billion | 4.01% | Food and Staples Retailing |
| General Motors (NYSE:GM) | $72.0 billion | 0.72% | Automobiles |
| Signet Jewelers (NYSE:SIG) | $3.8 billion | 1.35% | Specialty Retail |
1. Berkshire Hathaway
NYSE: BRKB
Key Data Points
Berkshire Hathaway (BRK.A -0.84%) (BRK.B -0.83%) has long been the gold standard for value investors, built on Warren Buffett's discipline of buying great businesses at fair prices. Since Buffett took over in 1964, Berkshire has nearly doubled the S&P 500's annualized return over more than 55 years -- a track record unlikely to be matched.
Buffett stepped down at the end of 2025, handing the reins to Greg Abel. The transition introduces some uncertainty, but Abel is expected to maintain the same value-oriented approach. Meanwhile, Berkshire sits on more than $375 billion in cash -- dry powder that could fuel a major acquisition or even a first-ever dividend. One note of caution: Berkshire was a net seller of stocks in 2024, a signal that Buffett viewed the broader market as expensive.
2. Target
NYSE: TGT
Key Data Points
Target (TGT -2.87%) is one of only a handful of national multicategory retailers, with stores in all 50 states and a growing e-commerce and same-day fulfillment business. After a rough stretch, including weak consumer discretionary spending, inventory issues, theft, and customer backlash over DEI policy changes, the stock trades at a P/E of just 12, a compelling price for a retailer of this quality.
Target is also a Dividend King with a 4.5% yield. The company expects 15% total sales growth over the next five years, and a recent CEO change could help accelerate the turnaround. Its challenges are real but fixable, which is exactly the kind of setup value investors look for.
3. General Motors
NYSE: GM
Key Data Points
By pure valuation, General Motors (GM) (GM -2.37%) may be the most obvious bargain on this list. It trades at a P/E of just 8.3 based on adjusted EPS -- a reflection of investor skepticism about the auto industry's direction and tariff uncertainty.
But GM has been making smart moves: shutting down its money-losing Cruise autonomous vehicle unit, scaling back EV investment as the transition slows, and aggressively buying back stock. It has reduced shares outstanding by nearly one-third over the last 18 months, a powerful way to grow EPS even without growing revenue.
4. Signet Jewelers
NYSE: SIG
Key Data Points
Signet Jewelers (SIG -3.40%) is the world's largest diamond jewelry retailer and, at a $3.6 billion market cap, the smallest name on this list, but value stocks come in all sizes. It trades at a P/E of just 10 on adjusted EPS, and the company has used that discount to its advantage, buying back 8% of shares outstanding in the last four quarters alone. Shares outstanding have fallen by roughly half over the past decade.
Concerns about lab-grown diamonds have weighed on the stock, but Signet is actually benefiting from that trend through higher average unit prices and new entry-level price points. Add in a smaller real estate footprint and a growing high-margin services business (repairs, warranties), and there's a clear path to improved profitability.
What makes a stock a value stock?
A value stock is one that trades at a lower price than its financials suggest it's worth. That gap between price and intrinsic value is what value investors are hunting for.
Most value stocks share a few common traits: they're typically mature, established businesses with stable revenues and earnings, modest but steady growth, and often a dividend. They're not exciting, and that's the point. Their share prices tend to be lower precisely because the market isn't pricing in much future growth.
It's worth noting that a cheap stock isn't automatically a value stock. Sometimes a low valuation reflects real, lasting problems rather than a temporary discount. The goal is to find stocks where the market has overreacted, and where the underlying business remains sound.
Don't underestimate the power of value stocks
While they may not be quite as thrilling as their growth stock counterparts, it's important to realize that value stocks can have just as much long-term potential, if not more. After all, a $1,000 investment in Berkshire Hathaway at the beginning of 1965 would be worth more than $28 million today.
Finding companies that trade for less than they are truly worth is a time-tested investment style that can pay off tremendously.
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