What are Value Stocks?
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 consumer cyclical sector:
- Citi Trends (NASDAQ:CTRN) - P/E: 3.72
- Genesco (NYSE:GCO) - P/E: 6.99
- Jerash Holdings (US) (NASDAQ:JRSH) - P/E: 8.13
- Adient (NYSE:ADNT) - P/E: 4.05
- Zumiez (NASDAQ:ZUMZ) - P/E: 6.34
Most recently, Citi Trends reported earnings per share at $0.42, whereas in Q4 earnings per share sat at $1.16. The company's most recent dividend yield sits at 1.35%, which has decreased by 0.27% from 1.62% last quarter.
Genesco saw an increase in earnings per share from 2.36 in Q3 to $3.48 now. This quarter, Jerash Holdings (US) experienced a decrease in earnings per share, which was $0.39 in Q2 and is now $0.13. Most recently, the company reported a dividend yield of 3.41%, which has increased by 0.16% from last quarter's yield of 3.25%.
Most recently, Adient reported earnings per share at $-0.13, whereas in Q1 earnings per share sat at $-0.38. The company's most recent dividend yield sits at 3.29%, which has increased by 1.27% from 2.02% last quarter.
Zumiez saw an increase in earnings per share from 1.25 in Q3 to $1.7 now.
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.
