In finance, the word “valeur” has several meanings, which often confuses savers: in French market vocabulary, valeur means a security or share. It can refer to a financial security (a “valeur mobilière”), a listed company (“the stocks in the CAC 40”), or the price assigned to an asset (“market value”, “intrinsic value”, “net asset value”). This glossary clarifies what a security in finance really is, explains the main value concepts used on the stock market and shows how they help investors make decisions in 2026.
First meaning: what is a security in finance?
A valeur mobilière (financial security) is a negotiable financial instrument issued by a company or a public body, which confers identical rights within each category. The main types of financial securities are:
- Shares: titles of ownership over part of a company’s capital, entitling the holder to dividends and to voting at general meetings;
- Bonds: debt securities, which entitle the holder to repayment of the capital lent and to the payment of interest;
- Hybrid securities: convertible bonds, subscription warrants and other instruments that combine features of both.
By extension, “valeur” refers to a listed company’s share: “a CAC 40 stock”, “a mid-cap stock”, “a growth stock”, “an income stock”. This is also where the security vs stock difference becomes clear: “stock” is the everyday American term, while “security” is the broader one, covering both shares and bonds — and matching the shares definition of a unit of ownership in a company’s capital.
Types of securities on the stock market
| Expression | Meaning |
|---|---|
| Growth stock | A company whose earnings are growing rapidly, and which is valued accordingly |
| Income stock | A company that pays a high, regular dividend |
| Cyclical stock | A company whose business follows the economic cycle (automotive, chemicals, construction) |
| Defensive stock | A company barely affected by the economic climate (healthcare, food, utilities) |
| Speculative stock | A highly volatile security, bought in the hope of quick gains, with a high level of risk |
| Mid-cap stock | A medium-sized company, often less closely followed by analysts |
Second meaning: the different measures of value
Market value (market capitalization)
The market value definition is simple: it is the price the market assigns to a company, namely the share price multiplied by the number of shares. It changes every second during the trading session and reflects investors’ expectations.
Book value
It is the amount of equity capital recorded on the balance sheet — in other words, the difference between assets and liabilities. The price-to-book ratio compares the market value with this book value.
Intrinsic value
It is the estimated “true” value of a company, regardless of its share price. It is usually calculated by discounting future cash flows, by comparing similar companies, or by summing the parts. Value investors seek to buy when the price is below this intrinsic value, with a margin of safety.
Nominal value
It is the face value of a share or a bond, fixed at issuance. For shares, it generally no longer bears any relation to the market price. For bonds, it is the amount repaid at maturity.
Net asset value (NAV)
For an investment fund or an ETF, it is the value of one unit, calculated by dividing the fund’s assets, net of fees, by the number of units.
Enterprise value
It is the market capitalization to which net debt is added. It represents the price you would have to pay to buy out the entire company, shareholders and creditors included. It is used in particular to calculate the enterprise value / EBITDA ratio.
Example: one company, several values
Take a fictional company with 10 million shares trading at 50 euros, 300 million euros of equity and 100 million euros of net debt:
- its market capitalization is 500 million euros;
- its book value is 300 million euros, i.e. 30 euros per share;
- its enterprise value is 600 million euros;
- if an analyst estimates its intrinsic value at 60 euros per share, the stock is undervalued by 20%.
Here the market is paying 1.67 times the book value, which suggests it expects a good return on equity. The whole difficulty of analysis lies in judging whether that premium is justified.
Value and price: the essential distinction
Warren Buffett sums up the difference with a famous formula: price is what you pay, value is what you get. The share price can drift away from intrinsic value for a long time, upward as well as downward. Phases of euphoria push prices above value, while phases of panic push them below. The long-term investor seeks to take advantage of these gaps rather than suffer them.
The ratios that connect price and value
To quickly compare the price paid with the value obtained, investors use simple ratios. The P/E ratio (price divided by earnings per share) shows how many years of current earnings the market is paying for; the price-to-book ratio compares the share price with book value per share; the dividend yield relates the annual dividend to the share price. No ratio is enough on its own: a low P/E can signal a company in decline, a high P/E a fast-growing company. They are mainly used to compare companies in the same sector, or a company with its own history.
How to use these concepts
- To select shares, compare the market value with book value and earnings, using our fundamental analysis guide.
- To invest in funds, track the net asset value and the fees; our guide to the best ETFs presents the main options.
- To compare indebted and non-indebted companies, use enterprise value rather than market capitalization alone.
Short-term trading, by contrast, focuses less on intrinsic value than on price movements and on how securities are traded. For those who want to explore this approach, our Vantage review presents a CFD broker and its demo account. CFDs are leveraged products that carry a high risk of loss. This article is for information purposes only and does not constitute investment advice.
Read next: Investing in Bonds and Ebitdar
FAQ
What is a financial security?
A negotiable financial security, such as a share or a bond, which confers identical rights within the same category.
What is the difference between market value and intrinsic value?
Market value is the price set by the market; intrinsic value is the estimate of what the company is really worth, regardless of its share price.
What is enterprise value?
Market capitalization plus net debt. It represents the total cost of buying out the company.
This article is educational in nature and does not constitute investment advice.