What is a Value Stock?
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 healthcare sector:
- Spok Holdings (NASDAQ:SPOK) - P/E: 8.96
- MEI Pharma (NASDAQ:MEIP) - P/E: 1.53
- Roivant Sciences (NASDAQ:ROIV) - P/E: 2.17
- Agile Therapeutics (NASDAQ:AGRX) - P/E: 0.17
- Exicure (NASDAQ:XCUR) - P/E: 0.34
Most recently, Spok Holdings reported earnings per share at $0.22, whereas in Q2 earnings per share sat at $0.23. The company's most recent dividend yield sits at 8.6%, which has decreased by 2.22% from 10.82% last quarter.
MEI Pharma's earnings per share for Q2 sits at $-1.66, whereas in Q1, they were at 8.46. Roivant Sciences saw an increase in earnings per share from -0.4 in Q2 to $-0.21 now. Agile Therapeutics saw an increase in earnings per share from -3.1 in Q2 to $-1.47 now. This quarter, Exicure experienced an increase in earnings per share, which was $-0.7 in Q1 and is now $-0.68.
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.