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.

The following stocks are considered to be notable value stocks in the healthcare sector:

1. Chimerix CMRX - P/E: 0.51
2. Voyager Therapeutics VYGR - P/E: 3.65
3. Spero Therapeutics SPRO - P/E: 7.53
4. Acorda Therapeutics ACOR - P/E: 1.63
5. Cross Country Healthcare CCRN - P/E: 7.09

This quarter, Chimerix experienced an increase in earnings per share, which was $-0.24 in Q1 and is now $-0.21. Most recently, Voyager Therapeutics reported earnings per share at $-0.51, whereas in Q1 earnings per share sat at $2.94. This quarter, Spero Therapeutics experienced an increase in earnings per share, which was $-0.25 in Q1 and is now $-0.23. Acorda Therapeutics's earnings per share for Q2 sits at $-7.55, whereas in Q1, they were at -13.8. Cross Country Healthcare has reported Q2 earnings per share at $0.69, which has decreased by 17.86% compared to Q1, which was 0.84.

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.