What are Value Stocks?

A value stock traditionally has a lower price when compared to stock prices of companies in the same industry. This indicates that the company may be undervalued, as investors are not expressing as much interest in such companies. The most commonly used way to check for value is with the price-to-earnings multiple, or P/E. A low P/E multiple is a good indication that the stock is undervalued.

Benzinga Insights has compiled a list of value stocks in the healthcare sector that may be worth watching:

Most recently, Innoviva reported earnings per share at 0.9, whereas in Q1 earnings per share sat at 0.84. Innoviva does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

This quarter, Relay Therapeutics experienced a decrease in earnings per share, which was -0.47 in Q1 and is now -0.64. Relay Therapeutics does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Most recently, Collegium Pharmaceutical reported earnings per share at 0.27, whereas in Q1 earnings per share sat at 0.41. Collegium Pharmaceutical does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Timber Pharmaceuticals has reported Q2 earnings per share at -0.08, which has decreased by 60.0% compared to Q1, which was -0.05. Timber Pharmaceuticals does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Voyager Therapeutics's earnings per share for Q2 sits at -0.8, whereas in Q1, they were at -0.58. Voyager Therapeutics does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

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.