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:
- Eagle Bulk Shipping EGLE - P/E: 2.57
- Pangaea Logistics Solns PANL - P/E: 2.51
- Atlas Air Worldwide Hldgs AAWW - P/E: 6.93
- CPI Aerostructures CVU - P/E: 5.11
- SFL Corp SFL - P/E: 6.2
Eagle Bulk Shipping's earnings per share for Q2 sits at $4.98, whereas in Q1, they were at 3.97. The company's most recent dividend yield sits at 17.41%, which has increased by 5.67% from 11.74% last quarter.
Pangaea Logistics Solns saw an increase in earnings per share from 0.35 in Q1 to $0.64 now. The company's most recent dividend yield sits at 5.94%, which has decreased by 0.28% from 6.22% last quarter.
Atlas Air Worldwide Hldgs has reported Q2 earnings per share at $3.36, which has increased by 12.37% compared to Q1, which was 2.99. This quarter, CPI Aerostructures experienced a decrease in earnings per share, which was $0.05 in Q3 and is now $-0.04. SFL Corp has reported Q2 earnings per share at $0.45, which has increased by 21.62% compared to Q1, which was 0.37. The company's most recent dividend yield sits at 8.71%, which has increased by 0.02% from 8.69% 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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