Price-to-Book

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.
References in periodicals archive ?
At current value, the price-to-book value of the company was 6.
Morris uses the price-to-book ratio, a measure of a stock's value in comparison to the worth of a company's hard assets, to separate the winners from the losers.
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.
On the other hand, growth investors specialize in hot or emerging markets and companies with high P/E, price-to-book and price-to-cash-flow ratios.
Investors are taking another look at price-to-book and price-to-earnings ratios,'' said Daniel Eagan, a portfolio manager at Black Rock in Philadelphia.
CHICAGO, April 16 /PRNewswire-FirstCall/ -- Aon Re Global, a unit of Aon Corporation , announced the release of its Price-to-Book study, which quantifies a more than 30 percent valuation differential that can exist for companies producing consistent quarterly earnings over those companies with more volatile earnings.
Of these ratios, price-to-book is the one preferred by Charles Smith, chief investment officer of Fort Pitt Capital Group, Pittsburgh.
Although some comparable companies continue to trade at below-book values in the after market, companies able to improve profitability and withstand public-market competition have been rewarded with higher price-to-book multiples.
AN INVESTOR WHO IS WILLING TO follow the value school of investing should consider eight factors in selecting securities (or mutual funds), including price-to-earnings ratio, price-to-cash flow ratio, price-to-book value ratio, dividend yield, private market value, adjusted net working capital, insider buying and stock repurchases.
While the price is fairly rich by value-investing standards, ``we don't define value necessarily in the conventional way, which focuses on low price-to-earnings and price-to-book and high yield,'' he said.
Eley says a low P/E is nice, but he's also looking for a sizable dividend yield and a low price-to-book value to signal a good time to buy shares.