what are hidden values 
hidden values are assets that are undervalued on a company s balance sheet and therefore may not be incorporated into or reflected in the company s share price so called value investors seek to uncover hidden values on a company s balance sheet that are often overlooked by the average investor often through the use of fundamental analysis an asset that is marked at book value but actually worth more in terms of its fair market price would be considered a hidden value understanding hidden valuethe essence of value investing is buying undervalued securities that is undervalued relative to their intrinsic values a value investor will determine a fair value in any number of ways depending on the type of company and then compare this intrinsic value to the value accorded to the security by the market if the discount is attractive enough for this value investor they will buy the shares and patiently await the potential convergence of the current market value to the intrinsic value an asset that is assigned by a company a certain value on the balance sheet to conform to generally accepted accounting principles gaap may be worth more in terms of fair market value intangible assets such as trademarks and patents could contain hidden values as could reserves of natural resource companies in some cases if an asset has long been held at a cost basis on the books it could be worth substantially more than what is reflected on the balance sheet likewise if an asset has been depreciated for accounting purposes especially when using an accelerated depreciation schedule it may actually hold more market value than it is attributed to have on the firm s balance sheet example of hidden valuea classic example of a hidden value is land land must be held at historic cost according to gaap accounting rules but there is a high likelihood that this kind of asset has significantly appreciated in value if owned for a long period of time if the land is isolated from the balance sheet and valued at current market prices it would probably have a value greater than what is recorded in the financial statements and perhaps comprise a non insignificant portion of the company s market capitalization a retailer such as tiffany or macy s with prime property in manhattan for instance could possess this type of hidden value the value investor would separately calculate the current market value of their properties in the determination of whether or how much of a discount to intrinsic value exists 