What Defines 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.
Below is a list of notable value stocks in the healthcare sector:
- Tilray TLRY - P/E: 9.43
- National Healthcare NHC - P/E: 8.11
- Sensus Healthcare SRTS - P/E: 6.22
- Achilles Therapeutics ACHL - P/E: 0.45
- Innoviva INVA - P/E: 6.62
Tilray has been featured as a value stock. Tilray's Q3 EPS sits at $0.03, which has not changed since last quarter (Q2). Most recently, National Healthcare reported earnings per share at $0.91, whereas in Q4 earnings per share sat at $1.02. Most recently, the company reported a dividend yield of 3.23%, which has decreased by 0.18% from last quarter's yield of 3.41%.
Sensus Healthcare saw a decrease in earnings per share from 0.32 in Q4 to $0.2 now. Achilles Therapeutics looks to be undervalued. It possesses an EPS of $-0.45, which has not changed since last quarter (Q4). Most recently, Innoviva reported earnings per share at $0.39, whereas in Q4 earnings per share sat at $0.14.
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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