What Defines 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.
Below is a list of notable value stocks in the communication services sector:
- DISH Network (NASDAQ:DISH) - P/E: 4.69
- AdTheorent Holding (NASDAQ:ADTH) - P/E: 4.4
- Millicom Intl Cellular (NASDAQ:TIGO) - P/E: 2.19
- Townsquare Media (NYSE:TSQ) - P/E: 7.62
- Scienjoy Holding (NASDAQ:SJ) - P/E: 4.93
This quarter, DISH Network experienced an increase in earnings per share, which was $0.68 in Q1 and is now $0.82. AdTheorent Holding has reported Q2 earnings per share at $0.62, which has increased by 2166.67% compared to Q1, which was -0.03. Millicom Intl Cellular saw an increase in earnings per share from 0.23 in Q1 to $1.14 now. Townsquare Media's earnings per share for Q2 sits at $0.71, whereas in Q1, they were at 0.19. The company's most recent dividend yield sits at 6.36%, which has increased by 2.15% from 4.21% last quarter.
Scienjoy Holding's earnings per share for Q2 sits at $0.24, whereas in Q1, they were at 0.34.
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.