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 defensive sector:
- Graham Hldgs (NYSE:GHC) - P/E: 8.53
- Natural Alternatives Intl (NASDAQ:NAII) - P/E: 7.23
- Tyson Foods (NYSE:TSN) - P/E: 9.03
- Sanderson Farms (NASDAQ:SAFM) - P/E: 6.55
- China Online Education Gr (NYSE:COE) - P/E: 2.18
Graham Hldgs saw an increase in earnings per share from 7.44 in Q3 to $8.55 now. The company's most recent dividend yield sits at 1.07%, which has increased by 0.03% from 1.04% last quarter.
Natural Alternatives Intl has reported Q2 earnings per share at $0.3, which has decreased by 41.18% compared to Q1, which was 0.51. Tyson Foods's earnings per share for Q1 sits at $2.87, whereas in Q4, they were at 2.3. The company's most recent dividend yield sits at 1.86%, which has decreased by 0.35% from 2.21% last quarter.
Sanderson Farms has reported Q1 earnings per share at $8.64, which has increased by 4.85% compared to Q4, which was 8.24. Its most recent dividend yield is at 0.93%, which has increased by 0.01% from 0.92% in the previous quarter.
This quarter, China Online Education Gr experienced an increase in earnings per share, which was $-0.13 in Q2 and is now $0.55.
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.
