What Defines a Value Stock?
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.
Below is a list of notable value stocks in the consumer cyclical sector:
- Green Brick Partners (NYSE:GRBK) - P/E: 5.9
- Companhia Brasileira (NYSE:CBD) - P/E: 7.5
- Container Store Group (NYSE:TCS) - P/E: 4.3
- Hooker Furnishings (NASDAQ:HOFT) - P/E: 9.81
- Sleep Number (NASDAQ:SNBR) - P/E: 9.98
This quarter, Green Brick Partners experienced an increase in earnings per share, which was $0.95 in Q3 and is now $1.24. Companhia Brasileira's earnings per share for Q4 sits at $0.52, whereas in Q3, they were at -0.06. The company's most recent dividend yield sits at 6.29%, which has increased by 5.45% from 0.84% last quarter.
Container Store Group's earnings per share for Q3 sits at $0.28, whereas in Q2, they were at 0.54. Hooker Furnishings has reported Q3 earnings per share at $-0.1, which has decreased by 116.13% compared to Q2, which was 0.62. The company's most recent dividend yield sits at 3.81%, which has increased by 0.58% from 3.23% last quarter.
Sleep Number's earnings per share for Q4 sits at $0.47, whereas in Q3, they were at 2.22.
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.
