What is 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 basic materials sector:
- Turquoise Hill Resources TRQ - P/E: 9.63
- Galiano Gold GAU - P/E: 4.5
- Clearwater Paper CLW - P/E: 7.5
- Caledonia Mining Corp CMCL - P/E: 8.62
- Celanese CE - P/E: 9.23
Turquoise Hill Resources saw an increase in earnings per share from 0.64 in Q3 to 0.79 now. Turquoise Hill Resources does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
Galiano Gold's earnings per share for Q4 sits at 0.08, whereas in Q3, they were at 0.01. Galiano Gold does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
Clearwater Paper saw a decrease in earnings per share from 1.59 in Q3 to 1.45 now. Clearwater Paper does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
This quarter, Caledonia Mining Corp experienced an increase in earnings per share, which was 0.34 in Q3 and is now 0.75. The company's most recent dividend yield sits at 3.36%, which has increased by 0.59% from 2.77% last quarter.
Most recently, Celanese reported earnings per share at 2.09, whereas in Q3 earnings per share sat at 1.95. Its most recent dividend yield is at 1.79%, which has decreased by 0.49% from 2.28% 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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