What Defines a Value Stock?
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.
Benzinga Insights has compiled a list of value stocks in the technology sector that may be worth watching:
- Zepp Health (NYSE:ZEPP) - P/E: 7.1
- BM Technologies (AMEX:BMTX) - P/E: 4.6
- Sigmatron International (NASDAQ:SGMA) - P/E: 2.63
- Taitron Components (NASDAQ:TAIT) - P/E: 5.47
- Auddia (NASDAQ:AUUD) - P/E: 3.22
Most recently, Zepp Health reported earnings per share at $-0.19, whereas in Q4 earnings per share sat at $0.12. This quarter, BM Technologies experienced an increase in earnings per share, which was $0.23 in Q3 and is now $0.26. Sigmatron International's earnings per share for Q3 sits at $0.75, whereas in Q2, they were at 0.69. Taitron Components saw a decrease in earnings per share from 0.11 in Q3 to $0.07 now. Auddia saw a decrease in earnings per share from -0.05 in Q4 to $-0.14 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.
