The opposite trade occurs when ETF shares trade at a discount to their underlying securities.
"Brian follows a true value approach, seeking companies that trade at a discount to historical valuations, " argues Stack.
Instead of owning one, own index futures, which trade at a discount whenever stock yields are higher than short-term interest rates.
To compete with Samsung, Apple has been forced to offer a trade-in discount of 7, 000 rupees towards a new iPhone 4.
FORBES: Apple In Trouble If U.S. Phone Market Follows France, India, China
Their shares trade at a discount to the other Italian banks because of their takeover-resistant structure, and they lack economies of scale.
In order for a real estate stock to gain consideration it must trade at a discount of at least 10% to its net asset value.
But falling European demand means falling Brent oil prices, which in turn means cheap Russian-based Urals Mountain oil prices that already trade at a discount to Brent.
He also found that it is very important to separate companies that trade at a discount because they are financially distressed from companies that are unfairly trading at a discount.
The shares have climbed more than 35% since, yet still trade at a discount of 23% to book value, the difference, or net worth, between its assets and its liabilities.
By comparing conglomerates' constituent businesses with similar, stand-alone ones, Mr Stendevad calculates that they now trade at a discount of around 9% more or less where things stood before the crisis of 2008.
He notes that the stock continues to trade at a discount to its peers, such as Kroger (KR) and Safeway (SWY) based on p-e ratios and price-to-EBITDA (earnings before interest, taxes, depreciation and amortization) multiples.
FORBES: Whole Foods Market: It Is One Of The Best Inflation Plays in Supermarkets
Shares of France's Unibail, says Corl, trade at a 16% discount to its real estate value.
Emeralds mined in Brazil and South Africa tend to trade at a 50% discount to Colombian stones.
One is to invest in closed-end funds that trade at the highest absolute discount from their net asset value.
Also, ETFs may trade at a premium or discount to their underlying holdings, which can help or hurt investors.
Actrade International, New York City, helps companies export products via an overseas network of distributors, and buys domestic commercial trade acceptance drafts at a discount.
"Investors say, 'Here we go again, ' and they lose faith in the market, " says Fuad Ahmed, chief executive of Success Trade Securities, owner of discount brokerage Just2Trade.
Today, Chinese stocks trade at a 20 percent discount.
FORBES: World Starting To See Big Bargains In Chinese Stocks
The reason firms don't do that is to avoid a significant overhang in the stock, which means other shares trade nervously, and at a discount.
Most funds should trade close to their five-year average discount or premium, Galley says.
FORBES: RiverNorth Profits From Clueless Closed-End Mutual Fund Investors
The final frontier is rapidly approaching: direct trading of overseas-listed stocks through discount brokers such as E-Trade and Schwab.
Another approach is to acknowledge that some closed end funds will always trade at discounts and that comparing the current discount to its one-year average discount will eventually result in funds returning to their average discounts.
For example, even with their recent surge, nearly all of the top gainers in the Forbes Investor over the past six weeks continue to trade at historically low valuations and at a discount to their larger peers.
On a price-to-book basis, shares currently trade at 1.34x, a 47% discount to the industry average of 2.53x.
Discount brokerages like Charles Schwab, E-Trade, Fidelity and TD Ameritrade do a healthy traffic in these derivatives.
"If you look at our stock and you do some analysis on it, the multiples that we trade at, the valuation that we trade at, in my opinion, is at a discount to our comps, " he said.
The company's shares trade in lockstep with the price of oil and at a discount to more well-rounded (but less profitable) competitors Jacobs Engineering and Fluor.
应用推荐