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Price-to-Book

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Price-to-Book
A ratio of the share price of a publicly-traded company to its book value per share, which is the company's total asset value less the value of its liabilities. The P/B is a ratio of investor sentiment on the value of a stock to its actual value according to the Generally Accepted Accounting Principles. A high P/B means either that investors have overvalued the company, or that its accountants have undervalued it.


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One way to search for such opportunities is to look for companies with low book value relative to stock price--or, to put it another way, a high price-to-book ratio.
Some say value investing is the investment philosophy that favors the purchase of stocks that are currently selling at low price-to-book ratios and have high dividend yields.
We studied five years of data, including market values, returns on assets, returns on equity, price-to-book ratios, price-to-earnings ratios and revenue growth.
 
 
 
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