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.
Benzinga Insights has compiled a list of value stocks in the communication services sector that may be worth watching:
- Verizon Communications (NYSE:VZ) – P/E: 7.76
- Liberty Latin America (NASDAQ:LILA) – P/E: 9.81
- Hello Gr (NASDAQ:MOMO) – P/E: 5.19
- Telecom Argentina (NYSE:TEO) – P/E: 4.79
- KT (NYSE:KT) – P/E: 7.11
Verizon Communications’s earnings per share for Q3 sits at $1.22, whereas in Q2, they were at 1.21. The company’s most recent dividend yield sits at 7.78%, which has increased by 0.45% from 7.33% last quarter.
This quarter, Liberty Latin America experienced an increase in earnings per share, which was $0.17 in Q2 and is now $0.29. Hello Gr saw an increase in earnings per share from 0.34 in Q1 to $0.43 now. Most recently, Telecom Argentina reported earnings per share at $0.23, whereas in Q2 earnings per share sat at $0.03. KT’s earnings per share for Q2 sits at $0.6, whereas in Q1, they were at 0.47.
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.
