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 labeled as a value stock.

Below is a list of notable value stocks in the communication services sector:

1. Otelco OTEL - P/E: 5.33
2. Jiayin Gr JFIN - P/E: 4.05
3. 58.com WUBA - P/E: 6.32
4. SciPlay SCPL - P/E: 8.31
5. Sinclair Broadcast Group SBGI - P/E: 5.13

Otelco saw a decrease in earnings per share from 0.64 in Q1 to 0.42 now. Otelco does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Jiayin Gr’s earnings per share for Q1 sits at 0.03, whereas in Q4, they were at 0.08. Jiayin Gr does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

This quarter, 58.com experienced an increase in earnings per share, which was 1.03 in Q4 and is now 2.09. 58.com does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

This quarter, SciPlay experienced an increase in earnings per share, which was 0.19 in Q1 and is now 0.27. SciPlay does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Sinclair Broadcast Group has reported Q2 earnings per share at 3.21, which has increased by 109.8% compared to Q1, which was 1.53. Most recently, the company reported a dividend yield of 3.73%, which has decreased by 1.47% from last quarter’s yield of 5.2%.

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.