An Empirical Study Of Value Investment In China Security Market

In a mature, healthy and rational security market, stock price should conform to stock's intrinsic value and reflect its changes in time. For the stocks chosen by value investment strategy, its market price should be explained more extensive and deeply by fundamental factors than ordinary stocks. In the past several years, as one of the most important security markets in the world, the situation of China security market is obviously not rational and mature. Considering this, the article studies the relationship between China value stock's price and fundamental factors by the theoretic and empirical method.The article firstly introduces the theory of value investment and gets the decisive factors to public company's intrinsic value. Then the article shows the development situation of our country's security market, the changes of main investment minds and the introduction and development of value investment idea in it. Basing on these, by linear regression analysis on value stock samples chosen in china security market, the article finds that fundamental factors can strongly explain the value stock price; the value stock with safety margin displays its rational aspect in the market, but it is not so stable and is easily influenced by the macro security market environment. It shows that value investment idea in our country is still not mature and scientific and is still in a low level. Finally, by linear regression on big value stock sample, the article gets the decisive model of value stock's intrinsic value, and this can be helpful for the value evaluation of value stock.