Understanding 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.
Below is a list of notable value stocks in the industrials sector:
- BlueLinx Hldgs BXC - P/E: 7.14
- Fly Leasing FLY - P/E: 2.64
- Orion Gr Hldgs ORN - P/E: 9.93
- Air Lease AL - P/E: 8.55
- China Yuchai Intl CYD - P/E: 7.79
This quarter, BlueLinx Hldgs experienced an increase in earnings per share, which was 0.92 in Q2 and is now 4.88. BlueLinx Hldgs does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
Fly Leasing saw a decrease in earnings per share from 0.32 in Q2 to -0.26 now. Its most recent dividend yield is at 7.74%, which has increased by 0.84% from 6.9% in the previous quarter.
Most recently, Orion Gr Hldgs reported earnings per share at 0.23, whereas in Q2 earnings per share sat at 0.04. Orion Gr Hldgs does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
Air Lease saw a decrease in earnings per share from 1.71 in Q2 to 1.47 now. Most recently, the company reported a dividend yield of 2.09%, which has decreased by 0.09% from last quarter's yield of 2.18%.
Most recently, China Yuchai Intl reported earnings per share at 0.38, whereas in Q2 earnings per share sat at 0.85. Its most recent dividend yield is at 8.71%, which has increased by 2.71% from 6.0% in the previous quarter.
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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