The Meaning Behind 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.
Below is a list of notable value stocks in the technology sector:
- Immersion (NASDAQ:IMMR) - P/E: 6.06
- Arrow Electronics (NYSE:ARW) - P/E: 7.18
- Surgepays (NASDAQ:SURG) - P/E: 5.67
- Gen Digital (NASDAQ:GEN) - P/E: 9.67
- HP (NYSE:HPQ) - P/E: 8.77
Immersion has reported Q3 earnings per share at $0.12, which has decreased by 57.14% compared to Q2, which was 0.28. Its most recent dividend yield is at 2.68%, which has increased by 1.01% from 1.67% in the previous quarter.
Most recently, Arrow Electronics reported earnings per share at $3.98, whereas in Q3 earnings per share sat at $4.14. Most recently, Surgepays reported earnings per share at $0.49, whereas in Q2 earnings per share sat at $0.4. Most recently, Gen Digital reported earnings per share at $0.49, whereas in Q2 earnings per share sat at $0.47. Its most recent dividend yield is at 2.13%, which has decreased by 0.54% from 2.67% in the previous quarter.
HP's earnings per share for Q4 sits at $0.9, whereas in Q3, they were at 0.86. Most recently, the company reported a dividend yield of 3.77%, which has decreased by 0.26% from last quarter's yield of 4.03%.
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.