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.
Benzinga Insights has compiled a list of value stocks in the consumer cyclical sector that may be worth watching:
- Lithia Motors (NYSE:LAD) – P/E: 4.84
- Build-A-Bear Workshop (NYSE:BBW) – P/E: 7.82
- Toll Brothers (NYSE:TOL) – P/E: 5.11
- Academy Sports (NASDAQ:ASO) – P/E: 8.61
- Asbury Automotive Gr (NYSE:ABG) – P/E: 4.4
Lithia Motors’s earnings per share for Q4 sits at $9.05, whereas in Q3, they were at 11.08. The company’s most recent dividend yield sits at 0.6%, which has decreased by 0.21% from 0.81% last quarter.
This quarter, Build-A-Bear Workshop experienced an increase in earnings per share, which was $0.51 in Q3 and is now $1.3. Toll Brothers has reported Q1 earnings per share at $1.7, which has decreased by 63.83% compared to Q4, which was 4.7. Most recently, the company reported a dividend yield of 1.41%, which has decreased by 0.17% from last quarter’s yield of 1.58%.
Academy Sports saw an increase in earnings per share from 1.69 in Q3 to $2.04 now. Its most recent dividend yield is at 0.61%, which has decreased by 0.01% from 0.62% in the previous quarter.
Asbury Automotive Gr saw a decrease in earnings per share from 9.23 in Q3 to $9.12 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.
