5 Value Stocks In The Basic Materials Sector

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 basic materials sector:

1. Galiano Gold GAU - P/E: 2.61
2. Arch Resources ARCH - P/E: 2.67
3. Friedman Indus FRD - P/E: 5.89
4. Gulf Resources GURE - P/E: 2.48
5. Steel Dynamics STLD - P/E: 5.93

This quarter, Galiano Gold experienced an increase in earnings per share, which was $-0.03 in Q4 and is now $0.04. Most recently, Arch Resources reported earnings per share at $4.04, whereas in Q1 earnings per share sat at $10.02. Friedman Indus saw an increase in earnings per share from 0.19 in Q3 to $0.86 now. Its most recent dividend yield is at 0.81%, which has increased by 0.12% from 0.69% in the previous quarter.

Most recently, Gulf Resources reported earnings per share at $-0.05, whereas in Q4 earnings per share sat at $-0.22. Steel Dynamics has reported Q2 earnings per share at $4.81, which has increased by 19.95% compared to Q1, which was 4.01. Its most recent dividend yield is at 1.75%, which has increased by 0.32% from 1.43% 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.