The Meaning Behind 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.

The following stocks are considered to be notable value stocks in the consumer defensive sector:

1. Adtalem Glb Education ATGE - P/E: 5.37
2. Alico ALCO - P/E: 8.71
3. Mannatech MTEX - P/E: 8.77
4. BellRing Brands BRBR - P/E: 5.48
5. Ingles Markets IMKTA - P/E: 5.28

Adtalem Glb Education has reported Q4 earnings per share at 0.58, which has decreased by 28.4% compared to Q3, which was 0.81. Adtalem Glb Education does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Alico has reported Q3 earnings per share at 0.25, which has decreased by 13.79% compared to Q2, which was 0.29. Most recently, the company reported a dividend yield of 1.19%, which has increased by 0.06% from last quarter’s yield of 1.13%.

Mannatech saw a decrease in earnings per share from 1.15 in Q1 to 0.47 now. Most recently, the company reported a dividend yield of 3.63%, which has increased by 0.24% from last quarter’s yield of 3.39%.

Most recently, BellRing Brands reported earnings per share at 0.08, whereas in Q2 earnings per share sat at 0.11. BellRing Brands does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

This quarter, Ingles Markets experienced an increase in earnings per share, which was 1.99 in Q2 and is now 3.1. Most recently, the company reported a dividend yield of 1.64%, which has decreased by 0.39% from last quarter’s yield of 2.03%.

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.