What are 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.
Below is a list of notable value stocks in the basic materials sector:
- Chemours (NYSE:CC) - P/E: 5.94
- Teck Resources (NYSE:TECK) - P/E: 6.66
- Boise Cascade (NYSE:BCC) - P/E: 3.11
- Ascent Industries (NASDAQ:ACNT) - P/E: 3.55
- Steel Dynamics (NASDAQ:STLD) - P/E: 4.88
Most recently, Chemours reported earnings per share at $1.24, whereas in Q2 earnings per share sat at $1.89. Most recently, the company reported a dividend yield of 3.46%, which has increased by 0.52% from last quarter's yield of 2.94%.
Most recently, Teck Resources reported earnings per share at $1.33, whereas in Q2 earnings per share sat at $2.55. Its most recent dividend yield is at 1.5%, which has increased by 0.05% from 1.45% in the previous quarter.
Boise Cascade has reported Q3 earnings per share at $5.52, which has increased by 0.55% compared to Q2, which was 5.49. This quarter, Ascent Industries experienced a decrease in earnings per share, which was $1.06 in Q2 and is now $0.06. Steel Dynamics saw a decrease in earnings per share from 6.73 in Q2 to $5.46 now. Its most recent dividend yield is at 1.48%, which has decreased by 0.18% from 1.66% in the previous quarter.
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.