What Defines 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.
Benzinga Insights has compiled a list of value stocks in the technology sector that may be worth watching:
- Ebix EBIX - P/E: 7.74
- Arrow Electronics ARW - P/E: 5.43
- Freshworks FRSH - P/E: 1.53
- DXC Technology DXC - P/E: 9.34
- Koss KOSS - P/E: 6.04
Ebix saw a decrease in earnings per share from 0.75 in Q2 to $0.7 now. Most recently, the company reported a dividend yield of 1.57%, which has increased by 0.36% from last quarter's yield of 1.21%.
This quarter, Arrow Electronics experienced a decrease in earnings per share, which was $5.78 in Q2 and is now $5.45. Freshworks saw an increase in earnings per share from -0.06 in Q2 to $-0.01 now. DXC Technology has been featured as a value stock. DXC Technology's Q2 EPS sits at $0.75, which has not changed since last quarter (Q1). Its most recent dividend yield is at 5.37%, which has increased by 2.21% from 3.16% in the previous quarter.
Most recently, Koss reported earnings per share at $-0.12, whereas in Q1 earnings per share sat at $1.01. The company's most recent dividend yield sits at 4.25%, which has decreased by 0.35% from 4.6% 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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