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.

The following stocks are considered to be notable value stocks in the communication services sector:

1. KT KT - P/E: 9.04
2. Otelco OTEL - P/E: 5.28
3. Jiayin Gr JFIN - P/E: 6.25
4. Momo MOMO - P/E: 7.57
5. Sinclair Broadcast Group SBGI - P/E: 4.5

KT saw a decrease in earnings per share from 0.04 in Q1 to 0.0 now. KT does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

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 has been featured as a value stock. Jiayin Gr's Q2 EPS sits at 0.03, which has not changed since last quarter (Q1). Jiayin Gr does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Momo’s earnings per share for Q2 sits at 0.43, whereas in Q1, they were at 0.47. Momo 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. 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.