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 labelled as a value stock.
Below is a list of notable value stocks in the communication services sector:
- Telefonica (NYSE:TEF) - P/E: 3.06
- Liberty Global (NASDAQ:LBTYA) - P/E: 1.1
- DISH Network (NASDAQ:DISH) - P/E: 8.16
- AMC Networks (NASDAQ:AMCX) - P/E: 7.34
- KT (NYSE:KT) - P/E: 6.04
This quarter, Telefonica experienced a decrease in earnings per share, which was $0.09 in Q3 and is now $0.08. Most recently, the company reported a dividend yield of 7.6%, which has decreased by 2.33% from last quarter's yield of 9.93%.
Most recently, Liberty Global reported earnings per share at $1.26, whereas in Q3 earnings per share sat at $0.48. DISH Network's earnings per share for Q4 sits at $0.87, whereas in Q3, they were at 0.88. This quarter, AMC Networks experienced a decrease in earnings per share, which was $2.68 in Q3 and is now $0.54. This quarter, KT experienced a decrease in earnings per share, which was $0.57 in Q3 and is now $0.38.
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.
