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.
The following stocks are considered to be notable value stocks in the consumer cyclical sector:
- Lakeland Industries (NASDAQ:LAKE) - P/E: 9.32
- Purple Innovation (NASDAQ:PRPL) - P/E: 1.73
- LL Flooring Holdings (NYSE:LL) - P/E: 6.83
- Boqii Holding (NYSE:BQ) - P/E: 1.12
- Romeo Power (NYSE:RMO) - P/E: 4.69
Lakeland Industries's earnings per share for Q3 sits at 0.35, whereas in Q2, they were at 0.31. Most recently, Purple Innovation reported earnings per share at -0.07, whereas in Q2 earnings per share sat at 0.05. LL Flooring Holdings saw a decrease in earnings per share from 0.41 in Q2 to 0.29 now. Boqii Holding has been featured as a value stock. Boqii Holding's Q2 EPS sits at -0.07, which has not changed since last quarter (Q1). Romeo Power has reported Q3 earnings per share at -0.15, which has increased by 31.82% compared to Q2, which was -0.22.
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.
