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 financial services sector:
- Gladstone Investment (NASDAQ:GAIN) - P/E: 4.97
- Sierra Bancorp (NASDAQ:BSRR) - P/E: 8.72
- Business First Bancshares (NASDAQ:BFST) - P/E: 8.97
- Banco BBVA Argentina (NYSE:BBAR) - P/E: 7.4
- Hope Bancorp (NASDAQ:HOPE) - P/E: 8.13
Gladstone Investment saw an increase in earnings per share from 0.23 in Q2 to $0.26 now. This quarter, Sierra Bancorp experienced a decrease in earnings per share, which was $0.63 in Q4 and is now $0.49. Its most recent dividend yield is at 3.74%, which has increased by 0.35% from 3.39% in the previous quarter.
Business First Bancshares saw a decrease in earnings per share from 0.57 in Q4 to $0.49 now. Its most recent dividend yield is at 1.77%, which has decreased by 0.13% from 1.9% in the previous quarter.
This quarter, Banco BBVA Argentina experienced an increase in earnings per share, which was $0.17 in Q3 and is now $0.23. Most recently, Hope Bancorp reported earnings per share at $0.5, whereas in Q4 earnings per share sat at $0.43. Most recently, the company reported a dividend yield of 3.6%, which has increased by 0.01% from last quarter's yield of 3.59%.
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.
