What are 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 technology sector:
- Trio-Tech Intl (AMEX:TRT) - P/E: 8.31
- Telefonaktiebolaget L M (NASDAQ:ERIC) - P/E: 9.55
- BM Technologies (AMEX:BMTX) - P/E: 5.42
- ChipMOS TECHNOLOGIES (NASDAQ:IMOS) - P/E: 4.4
- Nortech Systems (NASDAQ:NSYS) - P/E: 3.17
This quarter, Trio-Tech Intl experienced an increase in earnings per share, which was $-0.04 in Q3 and is now $0.19. Most recently, Telefonaktiebolaget L M reported earnings per share at $0.14, whereas in Q1 earnings per share sat at $0.1. The company's most recent dividend yield sits at 3.11%, which has increased by 1.6% from 1.51% last quarter.
BM Technologies saw a decrease in earnings per share from 0.36 in Q1 to $0.15 now. ChipMOS TECHNOLOGIES has reported Q2 earnings per share at $1.22, which has increased by 3.39% compared to Q1, which was 1.18. Most recently, the company reported a dividend yield of 8.81%, which has increased by 4.61% from last quarter's yield of 4.2%.
Nortech Systems saw an increase in earnings per share from 0.04 in Q1 to $0.25 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.