What is a Value Stock?
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 consumer cyclical sector:
- Sonic Automotive SAH - P/E: 5.12
- Bassett Furniture Indus BSET - P/E: 6.94
- RumbleON RMBL - P/E: 5.86
- Standard Motor Products SMP - P/E: 9.61
- Taylor Morrison Home TMHC - P/E: 3.0
Sonic Automotive has reported Q3 earnings per share at $2.23, which has decreased by 8.98% compared to Q2, which was 2.45. The company's most recent dividend yield sits at 2.51%, which has ('', 'not changed') by 0.0% from 2.51% last quarter.
This quarter, Bassett Furniture Indus experienced an increase in earnings per share, which was $0.81 in Q2 and is now $0.84. Most recently, the company reported a dividend yield of 3.9%, which has increased by 1.06% from last quarter's yield of 2.84%.
RumbleON saw an increase in earnings per share from 0.58 in Q1 to $1.2 now. Standard Motor Products has reported Q3 earnings per share at $1.05, which has increased by 12.9% compared to Q2, which was 0.93. Its most recent dividend yield is at 2.92%, which has increased by 0.63% from 2.29% in the previous quarter.
Taylor Morrison Home has reported Q3 earnings per share at $2.72, which has increased by 19.82% compared to Q2, which was 2.27.
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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