The Meaning Behind 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. Inpixon INPX - P/E: 0.04
2. NCR NCR - P/E: 6.59
3. VirnetX Hldg VHC - P/E: 1.41
4. China Index Holdings CIH - P/E: 3.2
5. ChipMOS TECHNOLOGIES IMOS - P/E: 6.88

This quarter, Inpixon experienced an increase in earnings per share, which was -0.92 in Q1 and is now -0.21. Inpixon does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

NCR has reported Q2 earnings per share at 0.27, which has decreased by 12.9% compared to Q1, which was 0.31. NCR does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Most recently, VirnetX Hldg reported earnings per share at -0.11, whereas in Q1 earnings per share sat at -0.08. VirnetX Hldg does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

China Index Holdings looks to be undervalued. It possesses an EPS of 0.1, which has not changed since last quarter (Q1). China Index Holdings does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

This quarter, ChipMOS TECHNOLOGIES experienced a decrease in earnings per share, which was 0.64 in Q1 and is now 0.51. Most recently, the company reported a dividend yield of 5.47%, which has increased by 2.47% from last quarter’s yield of 3.0%.

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.