What defines a value stock?
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.
Below is a list of notable value stocks in the defensive consumer sector:
- China Online Education Gr COE – P/E: 3.19
- Herbalife Nutrition HLF – P/E: 6.47
- pilgrim pride PPC – P/E: 8.17
- Mannatech MTEX – P/E: 6.33
- Bridford Foods BRIDGE – P/E: 3.52
This quarter, China Online Education Gr recorded an increase in earnings per share, which was -$0.94 in the first quarter and is now at -$0.67. Herbalife Nutrition reported Q2 earnings per share of $0.96, down 3.03% from Q1’s $0.99. Its most recent dividend yield is 1.71%, down 1.82% from 3.53% in the previous quarter.
Pilgrims Pride reported earnings per share of $1.54 for the second quarter, up 30.51% from the first quarter’s 1.18. Most recently, Mannatech reported earnings per share of $0.34 compared to earnings per share of $0.06 for the first quarter. Its most recent dividend yield is 3.2%, down 0.01% from 3.21% in the previous quarter.
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.