What are 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 communication services sector:

1. Vivid Seats (NASDAQ:SEAT) - P/E: 9.98
2. Gogo (NASDAQ:GOGO) - P/E: 8.95
3. GD Culture Group (NASDAQ:GDC) - P/E: 0.22
4. GRAVITY Co (NASDAQ:GRVY) - P/E: 4.32
5. Playtika Holding (NASDAQ:PLTK) - P/E: 10.0

Most recently, Vivid Seats reported earnings per share at $0.2, whereas in Q1 earnings per share sat at $0.15. This quarter, Gogo experienced an increase in earnings per share, which was $0.15 in Q1 and is now $0.21. Most recently, GD Culture Group reported earnings per share at $-0.07, whereas in Q1 earnings per share sat at $-0.01. GRAVITY Co has reported Q2 earnings per share at $4.92, which has increased by 22.08% compared to Q1, which was 4.03. Playtika Holding saw a decrease in earnings per share from 0.23 in Q1 to $0.21 now.

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.