Understanding Value Stocks
A value stock traditionally has a lower price when compared to stock prices of companies in the same industry. This indicates that the company may be undervalued, as investors are not expressing as much interest in such companies. The most commonly used way to check for value is with the price-to-earnings multiple, or P/E. A low P/E multiple is a good indication that the stock is undervalued.
Below is a list of notable value stocks in the healthcare sector:
- Cross Country Healthcare (NASDAQ:CCRN) - P/E: 7.31
- Prenetics Global (NASDAQ:PRE) - P/E: 1.0
- Spero Therapeutics (NASDAQ:SPRO) - P/E: 3.0
- Arcturus Therapeutics (NASDAQ:ARCT) - P/E: 6.62
- Zymeworks (NASDAQ:ZYME) - P/E: 2.83
This quarter, Cross Country Healthcare experienced a decrease in earnings per share, which was $0.69 in Q2 and is now $0.39. Prenetics Global saw an increase in earnings per share from -0.75 in Q2 to $-0.05 now. Its most recent dividend yield is at 1.99%, which has decreased by 0.02% from 2.01% in the previous quarter.
Spero Therapeutics saw an increase in earnings per share from -0.23 in Q2 to $-0.06 now. Most recently, Arcturus Therapeutics reported earnings per share at $-0.61, whereas in Q2 earnings per share sat at $-1.98. Most recently, Zymeworks reported earnings per share at $-0.38, whereas in Q2 earnings per share sat at $-0.75.
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.