What is 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.

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

1. Gray Television GTN - P/E: 8.92
2. KT KT - P/E: 9.23
3. Sinclair Broadcast Group SBGI - P/E: 4.89
4. Turkcell Iletisim TKC - P/E: 9.94
5. MSG Networks MSGN - P/E: 3.4

Most recently, Gray Television reported earnings per share at -0.02, whereas in Q1 earnings per share sat at 0.43. Gray Television does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

KT has reported Q1 earnings per share at 0.04, which has increased by 500.0% compared to Q4, which was -0.01. KT does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Most recently, Sinclair Broadcast Group reported earnings per share at 3.21, whereas in Q1 earnings per share sat at 1.53. The company’s most recent dividend yield sits at 3.73%, which has decreased by 1.47% from 5.2% last quarter.

This quarter, Turkcell Iletisim experienced a decrease in earnings per share, which was 0.07 in Q1 and is now 0.06. The company’s most recent dividend yield sits at 2.41%, which has decreased by 5.94% from 8.35% last quarter.

MSG Networks’s earnings per share for Q4 sits at 0.97, whereas in Q3, they were at 0.77. MSG Networks does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

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.