5 Value Stocks To Watch In The Consumer Cyclical Sector


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.

Below is a list of notable value stocks in the consumer cyclical sector:

  1. Torrid Holdings CURV - P/E: 7.28
  2. AutoNation AN - P/E: 7.21
  3. M/I Homes MHO - P/E: 5.18
  4. Lennar LEN - P/E: 8.91
  5. Digital Brands Group DBGI - P/E: 0.06

Torrid Holdings's earnings per share for Q1 sits at $0.11, whereas in Q4, they were at -0.04. AutoNation saw a decrease in earnings per share from 6.37 in Q4 to $6.05 now. M/I Homes has reported Q1 earnings per share at $3.64, which has decreased by 29.32% compared to Q4, which was 5.15. This quarter, Lennar experienced an increase in earnings per share, which was $2.12 in Q1 and is now $2.94. Most recently, the company reported a dividend yield of 1.23%, which has decreased by 0.19% from last quarter's yield of 1.42%.

Digital Brands Group saw an increase in earnings per share from -20.46 in Q4 to $-1.08 now.

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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