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 consumer cyclical sector that may be worth watching:
- Children's Place PLCE - P/E: 4.99
- Medifast MED - P/E: 8.83
- RumbleON RMBL - P/E: 7.17
- Berry Global Group BERY - P/E: 9.71
- LGI Homes LGIH - P/E: 5.34
Children's Place's earnings per share for Q2 sits at $-0.89, whereas in Q1, they were at 1.05. Its most recent dividend yield is at 3.17%, which has increased by 0.3% from 2.87% in the previous quarter.
Medifast has reported Q2 earnings per share at $3.87, which has increased by 7.8% compared to Q1, which was 3.59. The company's most recent dividend yield sits at 3.63%, which has decreased by 0.11% from 3.74% last quarter.
This quarter, RumbleON experienced an increase in earnings per share, which was $0.58 in Q1 and is now $1.2. Berry Global Group has reported Q3 earnings per share at $2.03, which has increased by 5.18% compared to Q2, which was 1.93. Most recently, LGI Homes reported earnings per share at $5.2, whereas in Q1 earnings per share sat at $3.25.
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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