What Defines 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.
Benzinga Insights has compiled a list of value stocks in the consumer defensive sector that may be worth watching:
- China Online Education Gr (NYSE:COE) - P/E: 1.85
- Adecoagro (NYSE:AGRO) - P/E: 9.79
- RYB Education (NYSE:RYB) - P/E: 3.32
- Sanderson Farms (NASDAQ:SAFM) - P/E: 6.69
- Alico (NASDAQ:ALCO) - P/E: 7.37
Most recently, China Online Education Gr reported earnings per share at $0.55, whereas in Q2 earnings per share sat at $-0.13. Adecoagro's earnings per share for Q4 sits at $0.52, whereas in Q3, they were at 0.32. RYB Education's earnings per share for Q3 sits at $-0.06, whereas in Q2, they were at 0.23. Most recently, Sanderson Farms reported earnings per share at $8.64, whereas in Q4 earnings per share sat at $8.24. Its most recent dividend yield is at 0.92%, which has decreased by 0.01% from 0.93% in the previous quarter.
This quarter, Alico experienced an increase in earnings per share, which was $-0.33 in Q4 and is now $-0.24. Most recently, the company reported a dividend yield of 6.14%, which has increased by 0.32% from last quarter's yield of 5.82%.
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.
