The Meaning of Value Stocks
A value stock is traditionally defined in terms of how investors in the market assess the future growth prospects of that company. Low P/E multiples are good basic indicators that the company is undervalued and most likely qualifies as a value stock.
Below is a list of notable value stocks in the technology sector:
- Avnet (NASDAQ: AVT) – P/E: 8.2
- GSE systems (NASDAQ: GVP) – P/E: 3.53
- Intel (NASDAQ: INTC) – C/P: 9.58
- RST (NASDAQ: TSRI) – P/E: 3.81
- Daqo New Energy (NYSE: DQ) – P/E: 4.41
Avnet’s earnings per share for the second quarter came in at $1.51, while in the first quarter it was 1.22. Its most recent dividend yield is 2.48%, up 0.07% from 2.41% in the previous quarter.
This quarter, GSE Systems experienced a decline in earnings per share, which was -$0.01 in Q3 and is now -$0.05. Intel reported fourth-quarter earnings per share of $1.09, down 36.26% from the third quarter, which was 1.71. Its most recent dividend yield is 2.86%, up 0.32% from 2.54% in the previous quarter.
TSR saw its earnings per share decline from 3.18 in the first quarter to $0.12 now. Most recently, Daqo New Energy reported earnings per share of $1.97, while third quarter earnings per share were $3.84.
Importance: A valuable security may need some time to rebound from its undervalued position. The risk of investing in a value stock is that this emergence never materializes.
