Understanding 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 technology sector:
- Arrow Electronics (NYSE:ARW) - P/E: 8.41
- LG Display Co (NYSE:LPL) - P/E: 6.22
- Intel (NASDAQ:INTC) - P/E: 9.75
- OppFi (NYSE:OPFI) - P/E: 2.05
- QIWI (NASDAQ:QIWI) - P/E: 2.39
Most recently, Arrow Electronics reported earnings per share at $5.37, whereas in Q3 earnings per share sat at $4.04. This quarter, LG Display Co experienced a decrease in earnings per share, which was $0.56 in Q3 and is now $0.21. Intel saw a decrease in earnings per share from 1.71 in Q3 to $1.09 now. The company's most recent dividend yield sits at 2.86%, which has increased by 0.32% from 2.54% last quarter.
OppFi's earnings per share for Q4 sits at $0.13, whereas in Q3, they were at 0.21. QIWI looks to be undervalued. It possesses an EPS of $0.6, which has not changed since last quarter (Q2). The company's most recent dividend yield sits at 15.54%, which has increased by 3.23% from 12.31% last quarter.
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.
