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 communication services sector:
- Millicom Intl Cellular (NASDAQ:TIGO) - P/E: 2.75
- Gogo (NASDAQ:GOGO) - P/E: 6.9
- Scienjoy Holding (NASDAQ:SJ) - P/E: 3.33
- Verizon Communications (NYSE:VZ) - P/E: 8.3
- JOYY (NASDAQ:YY) - P/E: 4.23
Millicom Intl Cellular has reported Q3 earnings per share at $-0.18, which has decreased by 115.79% compared to Q2, which was 1.14. Gogo's earnings per share for Q3 sits at $0.15, whereas in Q2, they were at 0.17. Scienjoy Holding's earnings per share for Q2 sits at $0.24, whereas in Q1, they were at 0.34. Most recently, Verizon Communications reported earnings per share at $1.32, whereas in Q2 earnings per share sat at $1.31. The company's most recent dividend yield sits at 6.7%, which has increased by 0.38% from 6.32% last quarter.
Most recently, JOYY reported earnings per share at $0.96, whereas in Q2 earnings per share sat at $0.65. Most recently, the company reported a dividend yield of 7.52%, which has increased by 1.23% from last quarter's yield of 6.29%.
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.