Understanding 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.
Below is a list of notable value stocks in the technology sector:
Most recently, Cheetah Mobile reported earnings per share at 0.07, whereas in Q3 earnings per share sat at 0.27. Cheetah Mobile does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
China Index Holdings has reported Q4 earnings per share at 0.15, which has increased by 25.0% compared to Q3, which was 0.12. China Index Holdings 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.
