Bill Nygren and his partners are value investors, and they invest in companies that they believe trade at a substantial discount to what they consider to be the true business value. They believe that, over time, the price of a stock will rise to reflect the value of the underlying company.

Bill Nygren thinks it is important to avoid value traps while practicing value investing. "A value trap is defined by disappointing fundamentals rather than a disappointing stock price," he added. "It's one of the risks of value investing." "The stock keeps getting cheaper and the outlook keeps getting worse." His top stocks are the following: GlaxoSmithKline PLC (GSK), Merck & Co Inc. (MRK), Bristol-Myers Squibb Company (BMY), H&R Block Inc. (HRB) and Encana Corp (ECA).

Source: Guru Focus

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