What is a Value Stock?
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.
The following stocks are considered to be notable value stocks in the technology sector:
- Canadian Solar (NASDAQ:CSIQ) – P/E: 8.4
- United Microelectronics (NYSE:UMC) – P/E: 6.57
- Veeco Instruments (NASDAQ:VECO) – P/E: 9.97
- Vishay Intertechnology (NYSE:VSH) – P/E: 9.21
- Immersion (NASDAQ:IMMR) – P/E: 6.94
Canadian Solar saw an increase in earnings per share from 1.11 in Q4 to $1.19 now. This quarter, United Microelectronics experienced a decrease in earnings per share, which was $0.25 in Q4 and is now $0.21. Most recently, the company reported a dividend yield of 2.28%, which has decreased by 3.06% from last quarter’s yield of 5.34%.
Veeco Instruments saw a decrease in earnings per share from 0.38 in Q4 to $0.3 now. This quarter, Vishay Intertechnology experienced an increase in earnings per share, which was $0.69 in Q4 and is now $0.79. Most recently, the company reported a dividend yield of 1.57%, which has decreased by 0.3% from last quarter’s yield of 1.87%.
Most recently, Immersion reported earnings per share at $0.33, whereas in Q4 earnings per share sat at $0.45. Its most recent dividend yield is at 1.67%, which has decreased by 0.12% from 1.79% in the previous quarter.
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.
