The Meaning Behind Value Stocks
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.
The following stocks are considered to be notable value stocks in the basic materials sector:
- Ascent Industries ACNT - P/E: 3.52
- CF Industries Holdings CF - P/E: 5.58
- Ramaco Resources METC - P/E: 3.84
- Gerdau GGB - P/E: 4.17
- Univar Solns UNVR - P/E: 8.75
Ascent Industries has reported Q3 earnings per share at $0.06, which has decreased by 94.34% compared to Q2, which was 1.06. CF Industries Holdings has reported Q3 earnings per share at $2.29, which has decreased by 63.0% compared to Q2, which was 6.19. Most recently, the company reported a dividend yield of 1.56%, which has decreased by 0.31% from last quarter's yield of 1.87%.
This quarter, Ramaco Resources experienced a decrease in earnings per share, which was $0.74 in Q2 and is now $0.6. Its most recent dividend yield is at 4.55%, which has decreased by 0.46% from 5.01% in the previous quarter.
Gerdau saw a decrease in earnings per share from 0.51 in Q2 to $0.34 now. Its most recent dividend yield is at 25.26%, which has increased by 13.84% from 11.42% in the previous quarter.
This quarter, Univar Solns experienced a decrease in earnings per share, which was $1.0 in Q2 and is now $0.84.
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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