Value investors buy such stocks and wait for the market to discover these stocks. When the discovery happens, the stock prices will go up, and value investors make money. It may sound simple. But it is not very easy to execute. The market may take very long to discover these stocks and it may test your patience. The discovery may not happen at all. That is why value mutual funds are recommended to only sophisticated investors.
A value investor tries to choose stocks that are available at cheaper valuations. These investors employ various ratios and methodology to identify such stocks. Essentially, they look for stocks that are available at a discount to their real or intrinsic value.