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.
Below is a list of notable value stocks in the basic materials sector:
- Orion Engineered Carbons (NYSE:OEC) - P/E: 8.17
- GoldMining (AMEX:GLDG) - P/E: 2.39
- Huntsman (NYSE:HUN) - P/E: 6.72
- Mercer Intl (NASDAQ:MERC) - P/E: 3.85
- Cemex (NYSE:CX) - P/E: 8.65
Orion Engineered Carbons's earnings per share for Q1 sits at $0.57, whereas in Q4, they were at 0.17. Most recently, the company reported a dividend yield of 0.56%, which has increased by 0.04% from last quarter's yield of 0.52%.
Most recently, GoldMining reported earnings per share at $-0.02, whereas in Q4 earnings per share sat at $0.03. Huntsman's earnings per share for Q1 sits at $1.19, whereas in Q4, they were at 0.95. Most recently, the company reported a dividend yield of 2.39%, which has increased by 0.08% from last quarter's yield of 2.31%.
This quarter, Mercer Intl experienced an increase in earnings per share, which was $1.12 in Q4 and is now $1.34. Its most recent dividend yield is at 1.9%, which has decreased by 0.42% from 2.32% in the previous quarter.
Cemex saw a decrease in earnings per share from 0.15 in Q4 to $0.13 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.
