5 Value Stocks To Watch In The Basic Materials Sector

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.

The following stocks are considered to be notable value stocks in the basic materials sector:

1. United States Steel X - P/E: 7.32
2. Celanese CE - P/E: 6.26
3. LSB Industries LXU - P/E: 6.51
4. Warrior Met Coal HCC - P/E: 5.36
5. Ferroglobe GSM - P/E: 8.98

Most recently, United States Steel reported earnings per share at $1.4, whereas in Q2 earnings per share sat at $1.92. The company's most recent dividend yield sits at 0.62%, which has decreased by 0.16% from 0.78% last quarter.

This quarter, Celanese experienced an increase in earnings per share, which was $2.17 in Q2 and is now $2.5. The company's most recent dividend yield sits at 2.29%, which has increased by 0.03% from 2.26% last quarter.

LSB Industries's earnings per share for Q3 sits at $-0.1, whereas in Q2, they were at 0.25. Warrior Met Coal has reported Q3 earnings per share at $1.85, which has increased by 13.5% compared to Q2, which was 1.63. The company's most recent dividend yield sits at 0.6%, which has decreased by 0.06% from 0.66% last quarter.

Most recently, Ferroglobe reported earnings per share at $0.27, whereas in Q2 earnings per share sat at $0.3. Most recently, the company reported a dividend yield of 2.99%, which has increased by 0.88% from last quarter's yield of 2.11%.

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.