What are 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:
- MarineMax (NYSE:HZO) - P/E: 5.19
- M/I Homes (NYSE:MHO) - P/E: 3.4
- Abercrombie & Fitch (NYSE:ANF) - P/E: 8.6
- Century Communities (NYSE:CCS) - P/E: 3.5
- Dixie Gr (NASDAQ:DXYN) - P/E: 8.75
MarineMax has reported Q2 earnings per share at $2.37, which has increased by 49.06% compared to Q1, which was 1.59. M/I Homes's earnings per share for Q1 sits at $3.16, whereas in Q4, they were at 3.83. Abercrombie & Fitch saw an increase in earnings per share from 0.86 in Q3 to $1.14 now. The company's most recent dividend yield sits at 1.94%, which has decreased by 2.94% from 4.88% last quarter.
Century Communities has reported Q1 earnings per share at $4.2, which has decreased by 12.13% compared to Q4, which was 4.78. Its most recent dividend yield is at 1.25%, which has increased by 0.41% from 0.84% in the previous quarter.
Dixie Gr saw a decrease in earnings per share from 0.4 in Q3 to $-0.26 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.
