intrinsic value

A measure of a stock’s worth free of emotions or other biased influences, such as the market or current events. There are several ways to calculate intrinsic value. Benjamin Graham felt that a firm’s tangible assets were a particularly important component, along with earnings, dividends, financial strength and stability. Graham felt investors should limit their purchases to stocks not selling far above this value, while stocks selling below their intrinsic value would offer an even better margin of safety to investors.