Understand value stocks

A value stock has traditionally been priced lower than the stock prices of companies in the same industry. This indicates that the company may be undervalued as investors are not showing that much interest in such companies. The most common way to check value is the price-to-earnings ratio, or P/E. A low P/E ratio is a good indication that the stock is undervalued.

The following stocks are considered notable value stocks in the consumer defensive space:

1. Albertsons company ACI – P/E: 7.26
2. pilgrim pride PPC – P/E: 6.41
3. 51 Talk online education COE – P/E: 2.66
4. Sunlands Technology STG – P/E: 1.44
5. Bridford Foods BRIDGE – P/E: 2.65

Most recently, Albertsons Companies reported earnings per share of $0.72, compared to earnings per share of $1.0 for the first quarter. Pilgrims Pride’s earnings per share are $1.09 for the third quarter, compared to $1.54 for the second quarter. This quarter, 51 Talk Online Education reported an increase in earnings per share, which was -$3.76 in the first quarter and is now -$2.68. During the quarter, Sunlands Technology saw an increase in earnings per share, which was $1.26 in the second quarter and is now $1.69. Bridgford Foods reported earnings per share of $0.04 for the third quarter, up 144.44% from the second quarter’s -0.09.

The significance: A value stock can take time to recover from its undervalued position. The risk of investing in a value stock is that it may never happen.