when are stocks mispriced?

There are four principal reasons, using our inhouse language, why stocks are mispriced in the market.

1. The accouting causes confusion to investors that won´t dig into the gory details
2. A risk factor is over or under discounted (i.e. fear of government expropriation)
3. Not understanding the business economies, hence the stability in the companies earnings, hence its quality of earnings
4. Growth potential is over or under priced into the stock

Regarding point 2, we look and try to understand the following risk factors for a company:-

Market risk
Real profits
Inflation
Economic cycle
Government
Technology
Regulation
Product substitution
Obsolescence
New competitor
Market structure
Currency
Non recurring affects (i.e. litigation, restructuring, accidents)
Final market demand
Insider actions
EPS relative to analyst expectations
Management record
Capital allocation
Business economics
Fraud
Stigma
Accounting