Buy These 5 Low Book Value Stocks For Solid Returns – Medielys
Buy These 5 Low Book Value Stocks For Solid Returns
By Rodger P. Luebke	 On Apr 6, 2021
Value investors prefer price-to-earnings (P / E) and price-to-sell (P / S) ratios to identify low-priced stocks offering exceptional returns. However, the underestimated price-to-book ratio (P / E ratio) is also an easy-to-use valuation tool for this purpose. The ratio is used to compare the value / market price of a stock to its book value.
The P / B ratio is calculated as follows:
P / B ratio = market price per share / book value of equity per share
The P / B ratio reflects the number of times book value investors are willing to pay for a stock. So if the stock price is $ 10 and the book value of equity is $ 5, investors are willing to pay twice the book value. Ideally, a P / B value of less than 1.0 is considered good, indicating a potentially undervalued stock. However, value investors often consider stocks with a P / B value below 3.0.
Now let’s understand the concept of book value.
In addition, the P / B ratio is not without limits. It is useful for businesses – like finance, investment, insurance, and banking or manufacturing companies – with many liquid / tangible assets on the books. However, it can be misleading for companies with large R&D spending, high debt, service companies, or those with negative profits.
In any case, the ratio is not particularly relevant as a stand-alone number. Other ratios such as P / E, P / S and debt / equity need to be analyzed before arriving at a reasonable investment decision.
Price to Book (Common Equity) below the X-Industry median:A P / B below the industry average implies that there is enough room for the stock to win.
PEG less than 1: The PEG links the P / E ratio to the company’s future growth rate. The PEG report gives a more complete picture than the P / E report. A value less than 1 indicates that the stock is undervalued and that investors should pay less for a stock that has good prospects for earnings growth.
Average volume over 20 days greater than or equal to 100,000:A substantial trading volume ensures that the stock is easily tradable.
Rank of Zacks less than or equal to # 2:Zacks Rank # 1 (Strong Buy) or 2 (Buy) stocks are known to outperform regardless of the market environment.
Value score equal to A or B: Our research shows that stocks with a value score of A or B when combined with a rank 1 or 2 of Zacks offer the best opportunities in the value investing space. .
Atlas Corp. ATCO, an asset management company, has a 3 to 5 year EPS growth rate of 15.6%. He currently has a Zacks Rank # 1 and a Value Score of A. You can see the full list of Zacks # 1 Rank stocks today here.
Based in Tokyo, Japan Honda Motor Co., Ltd. HMC is one of the world’s leading automobile manufacturers and the largest producer of motorcycles. It has a projected 3 to 5 year EPS growth rate of 21.8%. He currently has a Zacks Rank # 2 and a Value Score of A.
Owens & Minor IMO, a global healthcare solutions company, has a 3 to 5 year projected BPA growth rate of 15.1%. He currently has a Zacks Rank # 1 and a Value Score of A.
ArcelorMittal MT, the world’s largest steel and mining company, has a 3 to 5 year projected EPS growth rate of 15.2%. He currently has a Zacks Rank # 1 and a Value Score of A.
ASE Technology Holding Co., Ltd. ASX, a semiconductor manufacturing services company, has a Zacks Rank # 2 and a Value Score of A. The company has a 3 to 5 year projected BPA growth rate of 15%.
A small bank buys at book value
Remittance of dividends likely to affect the exchange rate and the current account balance