Value stocks are those considered by investors to be trading below their fair value. Fair value is often determined by using a company's price-earnings multiple, which is the company's stock price divided by its earnings per share. Stocks that trade below their historic P/E multiple are often considered value stocks.
Although some stocks remain value stocks for long periods of time, others can bounce back and forth between being considered value or growth stocks. For example, if a stock has a bad earnings report and tumbles in price, investors might avoid it for a period. That stock might be considered to have gone from growth to value status.
Other stocks simply trade at low valuations for a long period of time, and they might return most of their value to investors as dividends rather than in capital appreciation.