Understanding 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 healthcare sector:

1. Organogenesis Hldgs (NASDAQ:ORGO) - P/E: 5.78
2. Maravai LifeSciences (NASDAQ:MRVI) - P/E: 8.06
3. Aadi Bioscience (NASDAQ:AADI) - P/E: 2.7
4. AcelRx Pharmaceuticals (NASDAQ:ACRX) - P/E: 0.32
5. Vir Biotechnology (NASDAQ:VIR) - P/E: 3.62

Organogenesis Hldgs's earnings per share for Q3 sits at $0.04, whereas in Q2, they were at 0.09. Most recently, Maravai LifeSciences reported earnings per share at $0.37, whereas in Q2 earnings per share sat at $0.54. Most recently, Aadi Bioscience reported earnings per share at $-0.68, whereas in Q2 earnings per share sat at $-0.69. Most recently, AcelRx Pharmaceuticals reported earnings per share at $-0.94, whereas in Q2 earnings per share sat at $-1.2. Most recently, Vir Biotechnology reported earnings per share at $1.3, whereas in Q2 earnings per share sat at $-0.58.

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.