The Meaning Behind Value Stocks
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.
Below is a list of notable value stocks in the consumer defensive sector:
- Gravitas Education (NYSE:GEHI) - P/E: 3.03
- Bunge (NYSE:BG) - P/E: 9.14
- Natural Alternatives Intl (NASDAQ:NAII) - P/E: 6.17
- RLX Technology (NYSE:RLX) - P/E: 6.18
- Skillsoft (NYSE:SKIL) - P/E: 7.41
This quarter, Gravitas Education experienced an increase in earnings per share, which was $-0.06 in Q3 and is now $0.05. Bunge has reported Q1 earnings per share at $4.26, which has increased by 22.06% compared to Q4, which was 3.49. The company's most recent dividend yield sits at 2.28%, which has increased by 0.16% from 2.12% last quarter.
Most recently, Natural Alternatives Intl reported earnings per share at $0.41, whereas in Q2 earnings per share sat at $0.3. RLX Technology saw a decrease in earnings per share from 0.06 in Q4 to $0.04 now. Skillsoft has reported Q4 earnings per share at $0.06, which has increased by 118.75% compared to Q3, which was -0.32.
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.
