What are Value Stocks?
A value stock is traditionally defined in terms of how investors in the marketplace are valuing that company’s future growth prospects. Low P/E multiples are good base indicators that the company is undervalued and can most likely be labelled as a value stock.
Below is a list of notable value stocks in the consumer defensive sector:
- RLX Technology (NYSE:RLX) – P/E: 4.21
- Pilgrims Pride (NASDAQ:PPC) – P/E: 8.93
- China Online Education Gr (NYSE:COE) – P/E: 3.39
- Industrias Bachoco SAB (NYSE:IBA) – P/E: 7.33
- DAVIDsTEA (NASDAQ:DTEA) – P/E: 0.67
This quarter, RLX Technology experienced a decrease in earnings per share, which was $0.06 in Q4 and is now $0.04. Pilgrims Pride’s earnings per share for Q2 sits at $1.54, whereas in Q1, they were at 1.18. This quarter, China Online Education Gr experienced an increase in earnings per share, which was $-0.94 in Q1 and is now $-0.67. Industrias Bachoco SAB’s earnings per share for Q2 sits at $2.94, whereas in Q1, they were at 2.17. The company’s most recent dividend yield sits at 2.28%, which has increased by 0.23% from 2.05% last quarter.
DAVIDsTEA saw a decrease in earnings per share from 0.06 in Q4 to $-0.04 now.
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.
