What Defines a Value Stock?
A value stock is traditionally defined in terms of how investors in the marketplace are valuing that company's future growth prospects. Low P/E multiples are good base indicators that the company is undervalued and can most likely be labelled as a value stock.
Below is a list of notable value stocks in the consumer cyclical sector:
- Big 5 Sporting Goods BGFV - P/E: 4.61
- Haverty Furniture Cos HVT - P/E: 7.77
- Biglari Holdings BH - P/E: 0.43
- American Axle & Mfg Hldgs AXL - P/E: 4.64
- Century Communities CCS - P/E: 6.29
This quarter, Big 5 Sporting Goods experienced an increase in earnings per share, which was 0.9 in Q1 and is now 1.63. Big 5 Sporting Goods does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
Haverty Furniture Cos saw an increase in earnings per share from 1.04 in Q1 to 1.21 now. The company's most recent dividend yield sits at 2.72%, which has increased by 0.41% from 2.31% last quarter.
Most recently, Biglari Holdings reported earnings per share at -64.04, whereas in Q1 earnings per share sat at 223.29. Biglari Holdings does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
This quarter, American Axle & Mfg Hldgs experienced a decrease in earnings per share, which was 0.57 in Q1 and is now 0.29. American Axle & Mfg Hldgs does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
Most recently, Century Communities reported earnings per share at 3.47, whereas in Q1 earnings per share sat at 3.0. Its most recent dividend yield is at 0.9%, which has increased by 0.09% from 0.81% in the previous quarter.
The Significance: A value stock may need some time to rebound from its undervalued position. The risk of investing in a value stock is that this emergence may never materialize.
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