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.
Benzinga Insights has compiled a list of value stocks in the basic materials sector that may be worth watching:
- Teck Resources (NYSE:TECK) - P/E: 9.63
- Sylvamo (NYSE:SLVM) - P/E: 4.68
- Trinseo (NYSE:TSE) - P/E: 6.94
- Arcadia Biosciences (NASDAQ:RKDA) - P/E: 3.8
- Orion Engineered Carbons (NYSE:OEC) - P/E: 7.1
Teck Resources has reported Q4 earnings per share at $2.01, which has increased by 34.9% compared to Q3, which was 1.49. Sylvamo has reported Q4 earnings per share at $1.71, which has decreased by 24.67% compared to Q3, which was 2.27. Trinseo's earnings per share for Q4 sits at $0.83, whereas in Q3, they were at 2.01. Its most recent dividend yield is at 2.18%, which has decreased by 0.56% from 2.74% in the previous quarter.
Arcadia Biosciences saw an increase in earnings per share from -0.24 in Q2 to $-0.15 now. Orion Engineered Carbons has reported Q4 earnings per share at $0.17, which has decreased by 62.22% compared to Q3, which was 0.45. The company's most recent dividend yield sits at 0.52%, which has increased by 0.12% from 0.4% last quarter.
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.
