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 basic materials sector that may be worth watching:
- FutureFuel FF - P/E: 4.35
- Commercial Metals CMC - P/E: 7.98
- Schweitzer-Mauduit Intl SWM - P/E: 9.91
- Turquoise Hill Resources TRQ - P/E: 5.12
- Ramaco Resources METC - P/E: 9.31
FutureFuel has reported Q2 earnings per share at 0.35, which has decreased by 20.45% compared to Q1, which was 0.44. FutureFuel does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
Commercial Metals has reported Q3 earnings per share at 0.59, which has increased by 11.32% compared to Q2, which was 0.53. Most recently, the company reported a dividend yield of 2.62%, which has decreased by 0.99% from last quarter’s yield of 3.61%.
This quarter, Schweitzer-Mauduit Intl experienced an increase in earnings per share, which was 0.85 in Q1 and is now 0.9. The company’s most recent dividend yield sits at 5.48%, which has decreased by 0.54% from 6.02% last quarter.
Turquoise Hill Resources saw an increase in earnings per share from 0.03 in Q1 to 0.04 now. Turquoise Hill Resources does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
This quarter, Ramaco Resources experienced an increase in earnings per share, which was 0.05 in Q1 and is now 0.06. Ramaco Resources 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.
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