The Meaning Behind 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.
Below is a list of notable value stocks in the industrials sector:
- Air T AIRT - P/E: 4.0
- Eastern Co EML - P/E: 9.91
- Castor Maritime CTRM - P/E: 1.98
- Seaboard SEB - P/E: 8.81
- USD Partners USDP - P/E: 6.4
Most recently, Air T reported earnings per share at $1.5, whereas in Q3 earnings per share sat at $-0.44. Most recently, Eastern Co reported earnings per share at $0.46, whereas in Q4 earnings per share sat at $0.65. Most recently, the company reported a dividend yield of 1.89%, which has increased by 0.16% from last quarter's yield of 1.73%.
This quarter, Castor Maritime experienced an increase in earnings per share, which was $0.18 in Q4 and is now $0.21. Seaboard saw a decrease in earnings per share from 103.27 in Q4 to $89.28 now. Most recently, the company reported a dividend yield of 0.22%, which has decreased by 0.02% from last quarter's yield of 0.24%.
Most recently, USD Partners reported earnings per share at $0.32, whereas in Q4 earnings per share sat at $0.12. Most recently, the company reported a dividend yield of 7.95%, which has decreased by 0.51% from last quarter's yield of 8.46%.
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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