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.

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

1. The One Group Hospitality STKS - P/E: 6.29
2. Yunji YJ - P/E: 7.85
3. LightInTheBox Holding LITB - P/E: 9.29
4. Sally Beauty Holdings SBH - P/E: 9.94
5. Meritor MTOR - P/E: 7.0

The One Group Hospitality has reported Q2 earnings per share at -0.08, which has decreased by 14.29% compared to Q1, which was -0.07. The One Group Hospitality does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Yunji looks to be undervalued. It possesses an EPS of -0.0, which has not changed since last quarter (Q1). Yunji does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

LightInTheBox Holding has reported Q2 earnings per share at 0.08, which has increased by 700.0% compared to Q1, which was 0.01. LightInTheBox Holding does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Sally Beauty Holdings saw a decrease in earnings per share from 0.23 in Q2 to -0.11 now. Sally Beauty Holdings does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Meritor’s earnings per share for Q3 sits at -0.47, whereas in Q2, they were at 0.74. Meritor 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.