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.
Benzinga Insights has compiled a list of value stocks in the consumer cyclical sector that may be worth watching:
- Sportsman's Warehouse SPWH - P/E: 4.52
- D.R. Horton DHI - P/E: 5.4
- Tri Pointe Homes TPH - P/E: 3.77
- Kingsway Financial Servs KFS - P/E: 5.11
- Citi Trends CTRN - P/E: 3.66
Sportsman's Warehouse has reported Q3 earnings per share at $0.34, which has decreased by 5.56% compared to Q2, which was 0.36. D.R. Horton has been featured as a value stock. D.R. Horton's Q4 EPS sits at $4.67, which has not changed since last quarter (Q3). Most recently, the company reported a dividend yield of 1.37%, which has increased by 0.14% from last quarter's yield of 1.23%.
Most recently, Tri Pointe Homes reported earnings per share at $1.45, whereas in Q2 earnings per share sat at $1.33. Its most recent dividend yield is at 0.78%, which has increased by 0.09% from 0.69% in the previous quarter.
Most recently, Kingsway Financial Servs reported earnings per share at $0.1, whereas in Q2 earnings per share sat at $0.09. Most recently, Citi Trends reported earnings per share at $0.24, whereas in Q2 earnings per share sat at $-0.31. Most recently, the company reported a dividend yield of 1.35%, which has decreased by 0.27% from last quarter's yield of 1.62%.
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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