What is 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.
Below is a list of notable value stocks in the healthcare sector:
- Agile Therapeutics (NASDAQ:AGRX) - P/E: 0.25
- Panbela Therapeutics (NASDAQ:PBLA) - P/E: 0.0
- Procaps Gr (NASDAQ:PROC) - P/E: 8.96
- Exicure (NASDAQ:XCUR) - P/E: 0.43
- Zymeworks (NASDAQ:ZYME) - P/E: 3.4
Agile Therapeutics's earnings per share for Q3 sits at $-1.47, whereas in Q2, they were at -3.1. Most recently, Panbela Therapeutics reported earnings per share at $-2.42, whereas in Q2 earnings per share sat at $-7.95. Procaps Gr has reported Q3 earnings per share at $0.08, which has decreased by 70.37% compared to Q2, which was 0.27. Exicure has reported Q2 earnings per share at $-0.68, which has increased by 2.86% compared to Q1, which was -0.7. This quarter, Zymeworks experienced an increase in earnings per share, which was $-0.75 in Q2 and is now $-0.38.
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.