Value stocks refer to shares in companies that are considered undervalued by the market, often due to their low price-to-earnings (P/E) ratio or other valuation metrics. These stocks may be perceived as offering good value for money because they trade at a discount compared to similar companies with higher P/Es. Investors who believe in the concept of "value investing" seek out these undervalued stocks, hoping that their share prices will eventually rise to reflect their true worth, resulting in capital gains for the investor.