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.
Below is a list of notable value stocks in the technology sector:
- Sigmatron Intl (NASDAQ:SGMA) - P/E: 2.35
- MIND C.T.I. (NASDAQ:MNDO) - P/E: 8.62
- ClearOne (NASDAQ:CLRO) - P/E: 1.18
- Tower Semiconductor (NASDAQ:TSEM) - P/E: 6.18
- Arrow Electronics (NYSE:ARW) - P/E: 6.51
Sigmatron Intl's earnings per share for Q2 sits at $0.0, whereas in Q1, they were at 0.04. MIND C.T.I. has been featured as a value stock. MIND C.T.I.'s Q3 EPS sits at $0.06, which has not changed since last quarter (Q2). The company's most recent dividend yield sits at 10.32%, which has increased by 1.62% from 8.7% last quarter.
ClearOne saw a decrease in earnings per share from -0.04 in Q2 to $-0.05 now. Tower Semiconductor's earnings per share for Q3 sits at $0.54, whereas in Q2, they were at 0.46. This quarter, Arrow Electronics experienced a decrease in earnings per share, which was $4.37 in Q2 and is now $4.14.
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.