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.
The following stocks are considered to be notable value stocks in the basic materials sector:
- Nucor (NYSE:NUE) - P/E: 5.27
- Ingevity (NYSE:NGVT) - P/E: 9.45
- CVR Partners (NYSE:UAN) - P/E: 2.98
- ArcelorMittal (NYSE:MT) - P/E: 3.58
- Galiano Gold (AMEX:GAU) - P/E: 2.5
Nucor saw a decrease in earnings per share from 4.89 in Q4 to $4.45 now. The company's most recent dividend yield sits at 1.21%, which has decreased by 0.16% from 1.37% last quarter.
Ingevity has reported Q1 earnings per share at $1.09, which has increased by 91.23% compared to Q4, which was 0.57. CVR Partners has reported Q1 earnings per share at $9.64, which has increased by 6.87% compared to Q4, which was 9.02. The company's most recent dividend yield sits at 46.51%, which has increased by 3.36% from 43.15% last quarter.
This quarter, ArcelorMittal experienced an increase in earnings per share, which was $0.3 in Q4 and is now $1.27. The company's most recent dividend yield sits at 1.28%, which has increased by 0.51% from 0.77% last quarter.
Galiano Gold's earnings per share for Q1 sits at $0.04, whereas in Q4, they were at -0.03.
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.