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.
The following stocks are considered to be notable value stocks in the industrials sector:
- Eneti (NYSE:NETI) - P/E: 4.06
- USA Truck (NASDAQ:USAK) - P/E: 8.32
- Alpha Pro Tech (AMEX:APT) - P/E: 9.02
- Servotronics (AMEX:SVT) - P/E: 9.03
- Costamare (NYSE:CMRE) - P/E: 5.21
Eneti saw a decrease in earnings per share from -0.56 in Q3 to $-0.94 now. The company's most recent dividend yield sits at 0.58%, which has increased by 0.12% from 0.46% last quarter.
USA Truck saw an increase in earnings per share from 0.57 in Q3 to $1.38 now. Alpha Pro Tech saw a decrease in earnings per share from 0.06 in Q3 to $0.05 now. Servotronics saw a decrease in earnings per share from 0.49 in Q2 to $0.46 now. Most recently, the company reported a dividend yield of 1.0%, which has decreased by 0.76% from last quarter's yield of 1.76%.
Costamare's earnings per share for Q4 sits at $0.91, whereas in Q3, they were at 0.66. The company's most recent dividend yield sits at 3.64%, which has increased by 0.67% from 2.97% 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.
