What are 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 technology sector:

1. MIND C.T.I. MNDO - P/E: 8.57
2. Cohu COHU - P/E: 9.31
3. GSE Systems GVP - P/E: 3.24
4. ChipMOS TECHNOLOGIES IMOS - P/E: 7.42
5. Avnet AVT - P/E: 9.13

MIND C.T.I.'s earnings per share for Q1 sits at $0.07, whereas in Q4, they were at 0.08. Most recently, the company reported a dividend yield of 8.7%, which has increased by 0.15% from last quarter's yield of 8.55%.

Cohu saw a decrease in earnings per share from 0.72 in Q4 to $0.66 now. Its most recent dividend yield is at 0.95%, which has decreased by 0.43% from 1.38% in the previous quarter.

This quarter, GSE Systems experienced a decrease in earnings per share, which was $-0.05 in Q4 and is now $-0.16. ChipMOS TECHNOLOGIES saw a decrease in earnings per share from 1.41 in Q4 to $1.18 now. Most recently, the company reported a dividend yield of 8.81%, which has increased by 4.61% from last quarter's yield of 4.2%.

Avnet's earnings per share for Q3 sits at $2.15, whereas in Q2, they were at 1.51. The company's most recent dividend yield sits at 2.25%, which has decreased by 0.23% from 2.48% 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.