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.
The following stocks are considered to be notable value stocks in the industrials sector:
- Smith & Wesson Brands (NASDAQ:SWBI) - P/E: 3.44
- Hayward Holdings (NYSE:HAYW) - P/E: 8.67
- Genco Shipping & Trading (NYSE:GNK) - P/E: 3.4
- Tutor Perini (NYSE:TPC) - P/E: 8.36
- Encore Wire (NASDAQ:WIRE) - P/E: 3.03
This quarter, Smith & Wesson Brands experienced an increase in earnings per share, which was $0.69 in Q3 and is now $0.82. The company's most recent dividend yield sits at 3.05%, which has increased by 1.28% from 1.77% last quarter.
Hayward Holdings has reported Q1 earnings per share at $0.35, which has increased by 25.0% compared to Q4, which was 0.28. Genco Shipping & Trading's earnings per share for Q1 sits at $0.97, whereas in Q4, they were at 1.99. Most recently, the company reported a dividend yield of 13.85%, which has increased by 0.15% from last quarter's yield of 13.7%.
Tutor Perini saw a decrease in earnings per share from 0.57 in Q4 to $-0.42 now. Most recently, Encore Wire reported earnings per share at $7.96, whereas in Q4 earnings per share sat at $6.91. Its most recent dividend yield is at 0.06%, which has decreased by 0.01% from 0.07% in the previous 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.
