Understanding 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.
The following stocks are considered to be notable value stocks in the healthcare sector:
- Kiora Pharmaceuticals (NASDAQ:KPRX) - P/E: 0.84
- Procaps Gr (NASDAQ:PROC) - P/E: 6.16
- InMode (NASDAQ:INMD) - P/E: 9.55
- Alkermes (NASDAQ:ALKS) - P/E: 9.56
- Syros Pharmaceuticals (NASDAQ:SYRS) - P/E: 7.97
Kiora Pharmaceuticals saw a decrease in earnings per share from -0.79 in Q2 to $-0.89 now. Procaps Gr saw a decrease in earnings per share from 0.27 in Q2 to $0.08 now. Most recently, InMode reported earnings per share at $0.71, whereas in Q3 earnings per share sat at $0.61. Alkermes's earnings per share for Q4 sits at $0.48, whereas in Q3, they were at 0.64. This quarter, Syros Pharmaceuticals experienced a decrease in earnings per share, which was $-1.3 in Q2 and is now $-1.43.
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.