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Tue. 9 Nov 2021, 10:53am ETBenzinga
In: News

What are Value Stocks?

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:

  1. Bel Fuse (NASDAQ:BELFA) - P/E: 9.71
  2. Quhuo (NASDAQ:QH) - P/E: 5.46
  3. Gilat Satellite Networks (NASDAQ:GILT) - P/E: 9.92
  4. NextPlay Technologies (NASDAQ:NXTP) - P/E: 2.06
  5. Arrow Electronics (NYSE:ARW) - P/E: 9.34

Bel Fuse saw a decrease in earnings per share from 0.64 in Q2 to 0.48 now. The company's most recent dividend yield sits at 1.61%, which has increased by 0.27% from 1.34% last quarter.

Quhuo has reported Q2 earnings per share at 0.04, which has increased by 114.29% compared to Q1, which was -0.28. Quhuo does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Gilat Satellite Networks has been featured as a value stock. Gilat Satellite Networks's Q3 EPS sits at 0.01, which has not changed since last quarter (Q2). Most recently, the company reported a dividend yield of 10.13%, which has increased by 4.06% from last quarter's yield of 6.07%.

This quarter, NextPlay Technologies experienced an increase in earnings per share, which was -0.37 in Q1 and is now -0.1. NextPlay Technologies does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Most recently, Arrow Electronics reported earnings per share at 4.04, whereas in Q2 earnings per share sat at 3.34. Arrow Electronics does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

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.