Understanding 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.
The following stocks are considered to be notable value stocks in the industrials sector:
- Textainer Gr Hldgs TGH - P/E: 4.66
- Cresud SACIF CRESY - P/E: 5.03
- Acacia Research ACTG - P/E: 2.14
- Encore Wire WIRE - P/E: 3.34
- Danaos DAC - P/E: 1.67
Textainer Gr Hldgs has reported Q2 earnings per share at $1.63, which has increased by 10.14% compared to Q1, which was 1.48. The company's most recent dividend yield sits at 2.95%, which has increased by 0.18% from 2.77% last quarter.
Most recently, Cresud SACIF reported earnings per share at $2.14, whereas in Q3 earnings per share sat at $-0.09. The company's most recent dividend yield sits at 2.07%, which has decreased by 0.69% from 2.76% last quarter.
Acacia Research saw an increase in earnings per share from -1.61 in Q1 to $-1.44 now. Most recently, the company reported a dividend yield of 5.79%, which has increased by 3.62% from last quarter's yield of 2.17%.
Encore Wire has reported Q2 earnings per share at $10.71, which has increased by 34.55% compared to Q1, which was 7.96. Its most recent dividend yield is at 0.07%, which has increased by 0.01% from 0.06% in the previous quarter.
Danaos saw a decrease in earnings per share from 11.36 in Q1 to $7.59 now. The company's most recent dividend yield sits at 4.1%, which has increased by 0.34% from 3.76% last quarter.
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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