5 Promising Price-to-Book Value Stocks to Buy in February

Core Insights - Identifying value stocks requires understanding key financial metrics such as earnings per share and sales growth, along with a comprehensive analysis of fundamentals to determine if a stock is undervalued [1] Valuation Ratios - Price to Earnings (P/E) and Price to Sales (P/S) are commonly used ratios, but the Price to Book (P/B) ratio is also valuable for identifying low-priced stocks with high growth potential [2] - The P/B ratio is calculated as market capitalization divided by book value of equity, helping to assess whether a stock is under or overvalued [6] - A P/B ratio of less than one indicates that a stock is trading below its book value, suggesting it may be a good buy, while a ratio above one may indicate overvaluation [6][7] Book Value Definition - Book value represents the total value remaining for shareholders if a company were to liquidate its assets after settling all liabilities [4] - It is calculated by subtracting total liabilities from total assets, often equating to common stockholders' equity [5] Screening Parameters for Value Stocks - Stocks with a P/B ratio less than the industry median indicate potential for price appreciation [12] - A lower P/S ratio compared to the industry suggests the stock is undervalued relative to its sales [12] - A P/E ratio (F1) lower than the industry median is considered favorable [13] - A PEG ratio of less than 1 indicates that the stock is undervalued relative to its expected growth rate [14] - Stocks should have a current price of at least $5 and an average 20-day trading volume of 100,000 or more for liquidity [15] Selected Low Price-to-Book Stocks - General Motors (GM) has a projected 3-5 year EPS growth rate of 6.3% and currently holds a Zacks Rank of 2 with a Value Score of A [16][17] - KT Corporation has a projected EPS growth rate of 17.9% and holds a Zacks Rank of 1 with a Value Score of A [18] - The Greenbrier Companies has a projected EPS growth rate of 11.7% and also holds a Zacks Rank of 1 with a Value Score of A [19] - USANA Health Sciences has a projected EPS growth rate of 12.0% and holds a Zacks Rank of 1 with a Value Score of A [19] - EnerSys has a projected EPS growth rate of 18.0% and holds a Zacks Rank of 1 with a Value Score of A [20]