What is a Value Stock?
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.
The following stocks are considered to be notable value stocks in the industrials sector:
- Draganfly DPRO - P/E: 0.95
- Costamare CMRE - P/E: 3.78
- TFI International TFII - P/E: 9.77
- CVD Equipment CVV - P/E: 5.27
- Heritage-Crystal Clean HCCI - P/E: 9.55
This quarter, Draganfly experienced a decrease in earnings per share, which was $0.31 in Q4 and is now $-0.15. Most recently, Costamare reported earnings per share at $0.84, whereas in Q4 earnings per share sat at $0.91. TFI International saw an increase in earnings per share from 1.57 in Q4 to $1.68 now. CVD Equipment saw an increase in earnings per share from -0.18 in Q4 to $-0.15 now. This quarter, Heritage-Crystal Clean experienced a decrease in earnings per share, which was $0.79 in Q4 and is now $0.54.
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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