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.
Benzinga Insights has compiled a list of value stocks in the technology sector that may be worth watching:
- Canaan CAN - P/E: 1.68
- Silicon Motion Technology SIMO - P/E: 8.95
- LGL Group LGL - P/E: 1.85
- Nortech Systems NSYS - P/E: 3.01
- Applied Materials AMAT - P/E: 9.96
Canaan has reported Q2 earnings per share at $0.6, which has increased by 20.0% compared to Q1, which was 0.5. Silicon Motion Technology has reported Q2 earnings per share at $1.88, which has increased by 9.3% compared to Q1, which was 1.72. The company's most recent dividend yield sits at 2.33%, which has decreased by 0.63% from 2.96% last quarter.
Most recently, LGL Group reported earnings per share at $-0.34, whereas in Q1 earnings per share sat at $0.03. Nortech Systems saw an increase in earnings per share from 0.04 in Q1 to $0.25 now. Applied Materials's earnings per share for Q3 sits at $1.94, whereas in Q2, they were at 1.85. Most recently, the company reported a dividend yield of 1.13%, which has increased by 0.21% from last quarter's yield of 0.92%.
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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