Market Overview

A Look Into Basic Materials Sector Value Stocks

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The Meaning Behind Value Stocks

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 basic materials sector:

  1. Koppers Hldgs (NYSE: KOP) - P/E: 5.63
  2. Commercial Metals (NYSE: CMC) - P/E: 9.07
  3. FutureFuel (NYSE: FF) - P/E: 4.4
  4. Kinross Gold (NYSE: KGC) - P/E: 8.85
  5. Verso (NYSE: VRS) - P/E: 2.85

Most recently, Koppers Hldgs reported earnings per share at 1.64, whereas in Q2 earnings per share sat at 1.27. Koppers Hldgs does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

This quarter, Commercial Metals experienced an increase in earnings per share, which was 0.59 in Q3 and is now 0.79. Most recently, the company reported a dividend yield of 2.08%, which has decreased by 0.54% from last quarter’s yield of 2.62%.

FutureFuel has reported Q3 earnings per share at 0.16, which has decreased by 54.29% compared to Q2, which was 0.35. FutureFuel does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Kinross Gold’s earnings per share for Q3 sits at 0.25, whereas in Q2, they were at 0.15. Kinross Gold does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Most recently, Verso reported earnings per share at -0.92, whereas in Q2 earnings per share sat at -0.99. Verso 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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