Value Line Index

What is ‘Value Line Index’

A stock index that includes about 1,675 businesses from the New York Stock Exchange, the American Stock Exchange, the Nasdaq, and the over-the-counter market. Two versions of the Value Line Index exist: the Value Line Geometric Composite Index (the initial equally-weighted index) and the Value Line Arithmetic Composite Index (the more recent equally-weighted index) (an index which mirrors changes if a portfolio held equal amounts of stock.) In most cases, these indices are published in the Value Line Investment Survey, which was designed by Arnold Bernhard, the founder and CEO of Value Line Inc., and is sent to investors.

Explaining ‘Value Line Index’

According to Bernhard, the “Worth Line” from which the index derives its name refers to a multiple of cashflow that Bernhard would superimpose over a price chart in order to standardize the value of various firms.

Value Line is one of the most well-known and reputable financial research businesses in the industry. It has an exceptional track record in terms of performance. In reality, over the long term, the firm’s model portfolios have consistently outperformed the market.

Value Line Index FAQ

How many companies are in the Value Line Index?

The Value Line Composite Index has a total of 1681 firms in it, and it is comprised of the same companies as The Value Line Investment Survey®, with the exception of closed-end funds, which has a total of 1681 companies.

Is Value Line Index broad based?

According to the Value Line Index, approximately 1,700 equities listed on the American Stock Exchange (AMEX), New York Stock Exchange (NYSE), Nasdaq Stock Market (NASDAQ) and the over-the-counter market are valued at their respective market capitalizations.

What is the Value Line Index fund?

The First Trust's Investment Objectives and Investment Strategy Value Line® Dividend Index Product is an exchange-traded index fund that seeks to maximize dividends. Value Line® chooses from among those equities those that have a higher-than-average dividend yield as compared to the stated dividend yield of the Standard & Poor's 500 Composite Stock Price Index (the S&P 500).

Further Reading

  • The value line enigma (1965–1978): A case study of performance evaluation issues – [PDF]
  • The effect of value line investment survey rank changes on common stock prices – [PDF]
  • Hedging performance and basis risk in stock index futures – [PDF]
  • The relation between the Value Line enigma and post-earnings-announcement drift – [PDF]
  • How do mergers create value? A comparison of taxes, market power, and efficiency improvements as explanations for synergies – [PDF]
  • Trading cost expectations: Evidence from S&P 500 index replacement stock announcements – [PDF]
  • The effect on stock price of inclusion in or exclusion from the S&P 500 – [PDF]
  • The pricing of stock index futures – [PDF]
  • Relationship between firm value and financial structure: A study on firms in ISE industrial index – [PDF]