What Defines a Value Stock?
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.
Below is a list of notable value stocks in the technology sector:
- Sigmatron International SGMA - P/E: 3.45
- GoPro GPRO - P/E: 2.29
- O2Micro Intl OIIM - P/E: 8.51
- TSR TSRI - P/E: 2.35
- Taitron Components TAIT - P/E: 5.76
Most recently, Sigmatron International reported earnings per share at $0.75, whereas in Q2 earnings per share sat at $0.69. GoPro saw a decrease in earnings per share from 0.41 in Q4 to $0.09 now. O2Micro Intl saw a decrease in earnings per share from 0.09 in Q4 to $0.03 now. This quarter, TSR experienced a decrease in earnings per share, which was $0.12 in Q2 and is now $-0.02. Most recently, Taitron Components reported earnings per share at $0.34, whereas in Q4 earnings per share sat at $0.07.
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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