Understanding Value Stocks
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.
The following stocks are considered to be notable value stocks in the consumer defensive sector:
- Lincoln Educational Servs LINC - P/E: 7.21
- Natural Alternatives Intl NAII - P/E: 7.17
- DAVIDsTEA DTEA - P/E: 2.06
- RLX Technology RLX - P/E: 9.29
- Acme United ACU - P/E: 9.76
This quarter, Lincoln Educational Servs experienced an increase in earnings per share, which was $0.11 in Q3 and is now $0.73. Natural Alternatives Intl's earnings per share for Q2 sits at $0.3, whereas in Q1, they were at 0.51. DAVIDsTEA looks to be undervalued. It possesses an EPS of $-0.06, which has not changed since last quarter (Q2). Most recently, RLX Technology reported earnings per share at $0.06, whereas in Q3 earnings per share sat at $0.05. Most recently, Acme United reported earnings per share at $0.6, whereas in Q3 earnings per share sat at $0.5. The company's most recent dividend yield sits at 1.54%, which has decreased by 0.08% from 1.62% last 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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