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.

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

1. Destination XL Group DXLG - P/E: 7.47
2. Williams-Sonoma WSM - P/E: 9.84
3. Vipshop Holdings VIPS - P/E: 8.88
4. Sportsman's Warehouse SPWH - P/E: 9.04
5. Bassett Furniture Indus BSET - P/E: 8.29

Destination XL Group saw an increase in earnings per share from 0.11 in Q1 to $0.23 now. Most recently, Williams-Sonoma reported earnings per share at $3.12, whereas in Q1 earnings per share sat at $2.64. Most recently, the company reported a dividend yield of 2.87%, which has decreased by 0.17% from last quarter's yield of 3.04%.

Vipshop Holdings's earnings per share for Q2 sits at $0.59, whereas in Q1, they were at 0.51. Sportsman's Warehouse has reported Q1 earnings per share at $-0.39, which has decreased by 218.18% compared to Q4, which was 0.33. Bassett Furniture Indus's earnings per share for Q2 sits at $0.24, whereas in Q1, they were at 0.16. Its most recent dividend yield is at 4.52%, which has increased by 1.06% from 3.46% in the previous 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.