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.
Benzinga Insights has compiled a list of value stocks in the technology sector that may be worth watching:
- Intel (NASDAQ:INTC) - P/E: 9.37
- Rimini Street (NASDAQ:RMNI) - P/E: 6.29
- Versus Systems (NASDAQ:VS) - P/E: 0.01
- OppFi (NYSE:OPFI) - P/E: 1.9
- Freshworks (NASDAQ:FRSH) - P/E: 1.44
Intel saw an increase in earnings per share from 0.29 in Q2 to $0.59 now. The company's most recent dividend yield sits at 5.06%, which has increased by 1.14% from 3.92% last quarter.
Rimini Street's earnings per share for Q3 sits at $0.09, whereas in Q2, they were at 0.07. Versus Systems saw an increase in earnings per share from -1.95 in Q2 to $-1.79 now. Most recently, OppFi reported earnings per share at $0.01, whereas in Q2 earnings per share sat at $0.08. Freshworks's earnings per share for Q3 sits at $-0.01, whereas in Q2, they were at -0.06.
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.