What is a Value Stock?
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:
- Louisiana-Pacific (NYSE:LPX) – P/E: 5.29
- Covenant Logistics Group (NASDAQ:CVLG) – P/E: 8.18
- Atkore (NYSE:ATKR) – P/E: 8.69
- Castor Maritime (NASDAQ:CTRM) – P/E: 7.26
- Cornerstone Building (NYSE:CNR) – P/E: 3.36
Louisiana-Pacific has reported Q3 earnings per share at 3.87, which has decreased by 18.35% compared to Q2, which was 4.74. Most recently, the company reported a dividend yield of 1.19%, which has decreased by 0.09% from last quarter’s yield of 1.28%.
Covenant Logistics Group saw an increase in earnings per share from 0.96 in Q2 to 1.02 now. Atkore’s earnings per share for Q4 sits at 4.39, whereas in Q3, they were at 3.96. Castor Maritime has reported Q3 earnings per share at 0.16, which has increased by 128.57% compared to Q2, which was 0.07. Cornerstone Building saw a decrease in earnings per share from 0.67 in Q2 to 0.39 now.
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.