What Defines a Value Stock?
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.
Benzinga Insights has compiled a list of value stocks in the basic materials sector that may be worth watching:
- Intrepid Potash (NYSE:IPI) - P/E: 3.55
- Braskem (NYSE:BAK) - P/E: 2.77
- Companhia Siderurgica (NYSE:SID) - P/E: 2.58
- Reliance Steel & Aluminum (NYSE:RS) - P/E: 8.7
- Teck Resources (NYSE:TECK) - P/E: 9.4
Intrepid Potash has reported Q4 earnings per share at $0.6, which has increased by 100.0% compared to Q3, which was 0.3. This quarter, Braskem experienced a decrease in earnings per share, which was $1.7 in Q3 and is now $0.24. Its most recent dividend yield is at 7.77%, which has increased by 2.39% from 5.38% in the previous quarter.
This quarter, Companhia Siderurgica experienced a decrease in earnings per share, which was $0.75 in Q2 and is now $0.16. Reliance Steel & Aluminum's earnings per share for Q4 sits at $6.83, whereas in Q3, they were at 6.15. The company's most recent dividend yield sits at 2.16%, which has increased by 0.36% from 1.8% last quarter.
Teck Resources has reported Q4 earnings per share at $2.01, which has increased by 34.9% compared to Q3, which was 1.49.
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.
