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.
Benzinga Insights has compiled a list of value stocks in the consumer defensive sector that may be worth watching:
- Amcon Distributing (AMEX:DIT) – P/E: 7.09
- Alico (NASDAQ:ALCO) – P/E: 8.08
- Lincoln Educational Servs (NASDAQ:LINC) – P/E: 4.3
- Sendas Distribuidora (NYSE:ASAI) – P/E: 8.09
- Perdoceo Education (NASDAQ:PRDO) – P/E: 7.69
Amcon Distributing has reported Q4 earnings per share at 11.0, which has increased by 69.75% compared to Q3, which was 6.48. Most recently, Alico reported earnings per share at -0.33, whereas in Q3 earnings per share sat at 0.51. Most recently, the company reported a dividend yield of 5.82%, which has increased by 0.26% from last quarter’s yield of 5.56%.
Lincoln Educational Servs saw an increase in earnings per share from 0.06 in Q2 to 0.11 now. Sendas Distribuidora’s earnings per share for Q3 sits at 0.12, whereas in Q2, they were at 0.21. Most recently, Perdoceo Education reported earnings per share at 0.45, whereas in Q2 earnings per share sat at 0.41.
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.