What are Value Stocks?
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.
The following stocks are considered to be notable value stocks in the industrials sector:
- Universal Logistics Hldgs (NASDAQ:ULH) - P/E: 6.53
- Digital Ally (NASDAQ:DGLY) - P/E: 2.08
- Tutor Perini (NYSE:TPC) - P/E: 5.9
- Cornerstone Building (NYSE:CNR) - P/E: 4.48
- Covenant Logistics Group (NASDAQ:CVLG) - P/E: 6.24
Most recently, Universal Logistics Hldgs reported earnings per share at $0.6, whereas in Q3 earnings per share sat at $0.74. Most recently, the company reported a dividend yield of 2.5%, which has increased by 0.55% from last quarter's yield of 1.95%.
Digital Ally saw an increase in earnings per share from -0.1 in Q2 to $0.16 now. Tutor Perini has reported Q3 earnings per share at $0.3, which has decreased by 50.82% compared to Q2, which was 0.61. Most recently, Cornerstone Building reported earnings per share at $0.39, whereas in Q2 earnings per share sat at $0.67. Covenant Logistics Group's earnings per share for Q4 sits at $1.07, whereas in Q3, they were at 1.02.
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.
