Asset value

The net market value of a corporation's assets on a per-share basis, not the market value of the shares. A company is undervalued in the market when asset value exceeds market value.

Asset Value

In stocks, the market value of a company's assets per share. Asset value does not take into account the share price; one calculates the asset value by adding together the total value of the company's tangible and intangible assets and dividing by the shares outstanding. Fundamental analysts may use a company's asset value to determine whether it is undervalued or overvalued. A company with a share price below its asset value is considered undervalued and fundamental analysts may recommend buying shares in that company. On the other hand, a company with a share price above the asset value is overvalued and fundamental analysts may recommend selling it. See also: Net asset value.

asset value

Used to refer to the stock of a company, especially a stock whose price does not necessarily reflect the full value of the firm's assets. This situation may occur when the assets are not producing much current income. See also asset play.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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