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.

Benzinga Insights has compiled a list of value stocks in the industrials sector that may be worth watching:

1. Southwest Airlines LUV - P/E: 9.67
2. SPAR Group SGRP - P/E: 8.67
3. MasTec MTZ - P/E: 8.0
4. BG Staffing BGSF - P/E: 8.08
5. Heidrick & Struggles Intl HSII - P/E: 9.64

This quarter, Southwest Airlines experienced a decrease in earnings per share, which was -0.15 in Q1 and is now -2.67. Most recently, the company reported a dividend yield of 1.25%, which has not changed from last quarter.

SPAR Group saw an increase in earnings per share from -0.03 in Q4 to 0.01 now. SPAR Group does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

MasTec’s earnings per share for Q1 sits at 0.6, whereas in Q4, they were at 1.3. MasTec does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

BG Staffing has reported Q1 earnings per share at 0.28, which has decreased by 24.32% compared to Q4, which was 0.37. The company’s most recent dividend yield sits at 1.97%, which has decreased by 4.03% from 6.0% last quarter.

This quarter, Heidrick & Struggles Intl experienced a decrease in earnings per share, which was 0.54 in Q4 and is now 0.44. The company’s most recent dividend yield sits at 2.55%, which has increased by 0.36% from 2.19% last 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.