The market is willing to pay more for them because they are leading companies with the potential for powerful, consistent earnings growth, and may therefore be worth considerably more in the future. The job of growth stock managers is to determine if a stock's price is justified, based on the company's potential for expansion. Value Stocks Value managers look for stocks that are bargains based upon certain valuation criteria. They believe that the true value of a stock is not reflected in its price, and, over time, its price will increase faster than stocks that are fully-priced. In general, the value style can be a more conservative approach to stock selection.
Value stocks tend to be inexpensive relative to what they are currently worth.
The market isn't willing to pay more for them because they're from companies that are out of favor for some reason or another. The job of value managers is to identify companies poised for a turnaround, leading to rising earnings and higher stock prices. Both styles have their proponents, but neither has been shown to provide consistently higher returns than the other. What's important for stock investors to know is that both styles tend to run in cycles. One style may be in favor for a couple of years while the other is out of favor.