What Defines 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 basic materials sector that may be worth watching:
- Vale (NYSE:VALE) - P/E: 7.57
- Origin Mat (NASDAQ:ORGN) - P/E: 2.44
- Warrior Met Coal (NYSE:HCC) - P/E: 7.11
- Sylvamo (NYSE:SLVM) - P/E: 7.34
- Mosaic (NYSE:MOS) - P/E: 9.14
Most recently, Vale reported earnings per share at $0.66, whereas in Q2 earnings per share sat at $0.2. Origin Mat has reported Q3 earnings per share at $0.22, which has increased by 540.0% compared to Q2, which was -0.05. This quarter, Warrior Met Coal experienced an increase in earnings per share, which was $1.63 in Q2 and is now $1.85. Most recently, the company reported a dividend yield of 0.6%, which has decreased by 0.06% from last quarter's yield of 0.66%.
This quarter, Sylvamo experienced an increase in earnings per share, which was $1.14 in Q2 and is now $1.7. Its most recent dividend yield is at 2.39%, which has decreased by 0.46% from 2.85% in the previous quarter.
Most recently, Mosaic reported earnings per share at $0.68, whereas in Q2 earnings per share sat at $1.04. The company's most recent dividend yield sits at 2.26%, which has increased by 0.11% from 2.15% last 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.