What is a Value Stock?
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.
Benzinga Insights has compiled a list of value stocks in the consumer cyclical sector that may be worth watching:
- Hamilton Beach Brands (NYSE:HBB) - P/E: 5.73
- Green Brick Partners (NYSE:GRBK) - P/E: 5.36
- Sportsman's Warehouse (NASDAQ:SPWH) - P/E: 4.81
- OneWater Marine (NASDAQ:ONEW) - P/E: 3.52
- Rave Restaurant Gr (NASDAQ:RAVE) - P/E: 3.62
Most recently, Hamilton Beach Brands reported earnings per share at $0.43, whereas in Q2 earnings per share sat at $0.36. Most recently, the company reported a dividend yield of 3.02%, which has decreased by 0.51% from last quarter's yield of 3.53%.
This quarter, Green Brick Partners experienced a decrease in earnings per share, which was $2.08 in Q2 and is now $1.57. Sportsman's Warehouse has reported Q3 earnings per share at $0.34, which has decreased by 5.56% compared to Q2, which was 0.36. This quarter, OneWater Marine experienced a decrease in earnings per share, which was $1.28 in Q4 and is now $0.61. Rave Restaurant Gr has been featured as a value stock. Rave Restaurant Gr's Q2 EPS sits at $0.02, which has not changed since last quarter (Q1).
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.