Understanding 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 consumer defensive sector:

Herbalife Nutrition has reported Q4 earnings per share at $0.53, which has decreased by 41.76% compared to Q3, which was 0.91. The company's most recent dividend yield sits at 1.71%, which has decreased by 1.82% from 3.53% last quarter.

Adecoagro's earnings per share for Q4 sits at $0.17, whereas in Q3, they were at 0.43. United Natural Foods saw a decrease in earnings per share from 1.13 in Q1 to $0.78 now. Tyson Foods has reported Q1 earnings per share at $0.85, which has decreased by 47.85% compared to Q4, which was 1.63. Most recently, the company reported a dividend yield of 3.13%, which has increased by 0.24% from last quarter's yield of 2.89%.

Industrias Bachoco SAB has reported Q4 earnings per share at $0.08, which has decreased by 91.75% compared to Q3, which was 0.97. The company's most recent dividend yield sits at 2.28%, which has increased by 0.23% from 2.05% 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.