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.
The following stocks are considered to be notable value stocks in the basic materials sector:
- Ternium (NYSE:TX) - P/E: 2.47
- Koppers Hldgs (NYSE:KOP) - P/E: 8.06
- Schnitzer Steel Indus (NASDAQ:SCHN) - P/E: 5.94
- Hycroft Mining Holding (NASDAQ:HYMC) - P/E: 0.77
- Commercial Metals (NYSE:CMC) - P/E: 7.48
Most recently, Ternium reported earnings per share at 6.12, whereas in Q2 earnings per share sat at 5.21. Its most recent dividend yield is at 1.7%, which has increased by 1.04% from 0.66% in the previous quarter.
This quarter, Koppers Hldgs experienced a decrease in earnings per share, which was 1.41 in Q2 and is now 1.01. Most recently, Schnitzer Steel Indus reported earnings per share at 1.58, whereas in Q4 earnings per share sat at 1.81. Its most recent dividend yield is at 1.4%, which has decreased by 0.01% from 1.41% in the previous quarter.
Hycroft Mining Holding saw a decrease in earnings per share from -0.14 in Q2 to -0.39 now. This quarter, Commercial Metals experienced an increase in earnings per share, which was 1.26 in Q4 and is now 1.62. Its most recent dividend yield is at 1.5%, which has decreased by 0.24% from 1.74% in the previous quarter.
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.
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