The Meaning Behind 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.
Benzinga Insights has compiled a list of value stocks in the communication services sector that may be worth watching:
- Sphere Entertainment (NYSE:SPHR) - P/E: 3.88
- SK Telecom Co (NYSE:SKM) - P/E: 9.62
- Verizon Communications (NYSE:VZ) - P/E: 7.63
- GD Culture Group (NASDAQ:GDC) - P/E: 0.21
- Liberty Latin America (NASDAQ:LILAK) - P/E: 9.88
This quarter, Sphere Entertainment experienced a decrease in earnings per share, which was $10.21 in Q4 and is now $1.9. SK Telecom Co's earnings per share for Q2 sits at $0.63, whereas in Q1, they were at 0.57. This quarter, Verizon Communications experienced an increase in earnings per share, which was $1.21 in Q2 and is now $1.22. Most recently, the company reported a dividend yield of 6.91%, which has decreased by 0.87% from last quarter's yield of 7.78%.
This quarter, GD Culture Group experienced a decrease in earnings per share, which was $-0.07 in Q2 and is now $-1.15. Liberty Latin America's earnings per share for Q3 sits at $0.29, whereas in Q2, they were at 0.17.
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.