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 industrials sector that may be worth watching:
- Avis Budget Gr CAR - P/E: 7.19
- Insteel Indus IIIN - P/E: 7.72
- Resources Connection RGP - P/E: 7.85
- Encore Wire WIRE - P/E: 3.9
- Preformed Line Products PLPC - P/E: 7.53
Avis Budget Gr has reported Q1 earnings per share at $9.99, which has increased by 41.1% compared to Q4, which was 7.08. Insteel Indus's earnings per share for Q2 sits at $1.99, whereas in Q1, they were at 1.18. This quarter, Resources Connection experienced an increase in earnings per share, which was $0.47 in Q2 and is now $0.65. Most recently, the company reported a dividend yield of 3.2%, which has decreased by 0.02% from last quarter's yield of 3.22%.
Encore Wire saw an increase in earnings per share from 6.91 in Q4 to $7.96 now. Its most recent dividend yield is at 0.06%, which has decreased by 0.01% from 0.07% in the previous quarter.
Preformed Line Products's earnings per share for Q1 sits at $2.49, whereas in Q4, they were at 1.79. The company's most recent dividend yield sits at 1.27%, which has decreased by 0.08% from 1.35% 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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