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.

Benzinga Insights has compiled a list of value stocks in the communication services sector that may be worth watching:

1. Telephone and Data TDS - P/E: 9.79
2. Otelco OTEL - P/E: 5.78
3. Nexstar Media Group NXST - P/E: 8.82
4. SciPlay SCPL - P/E: 8.11
5. Momo MOMO - P/E: 7.51

Most recently, Telephone and Data reported earnings per share at 0.66, whereas in Q2 earnings per share sat at 0.56. Most recently, the company reported a dividend yield of 3.51%, which has increased by 0.57% from last quarter’s yield of 2.94%.

Otelco’s earnings per share for Q3 sits at 0.36, whereas in Q2, they were at 0.42. Otelco does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Most recently, Nexstar Media Group reported earnings per share at 4.08, whereas in Q2 earnings per share sat at 2.02. Most recently, the company reported a dividend yield of 2.56%, which has decreased by 0.08% from last quarter’s yield of 2.64%.

SciPlay’s earnings per share for Q3 sits at 0.23, whereas in Q2, they were at 0.27. SciPlay does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Momo saw a decrease in earnings per share from 0.47 in Q1 to 0.43 now. Momo 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.