5 Low Price-to-Book Stocks Worthy of Value Investors' Attention

Core Concept - Value investors seek stocks they believe are undervalued by the market, capitalizing on price movements that do not align with a company's long-term fundamentals [1] Group 1: Price-to-Book (P/B) Ratio - The P/B ratio is a key metric for value investors, comparing a stock's market value to its book value, calculated as market price per share divided by book value of equity per share [2][6] - A P/B ratio of less than one indicates a stock is undervalued, while a ratio greater than one suggests it may be overvalued [6][7] - Examples of stocks with favorable P/B ratios include General Motors (GM), KT Corporation (KT), The Greenbrier Companies (GBX), USANA Health Sciences (USNA), and Enersys (ENS) [2] Group 2: Book Value Definition - Book value represents the total value remaining for shareholders if a company were to liquidate its assets after settling all liabilities, calculated by subtracting total liabilities from total assets [4][5] Group 3: Limitations of P/B Ratio - The P/B ratio is most relevant for industries with tangible assets, such as finance and manufacturing, but may be misleading for companies with high R&D expenses or significant debt [9][10] - It is advisable to analyze P/B in conjunction with other ratios like P/E and P/S for a comprehensive investment decision [10] Group 4: Screening Parameters - Screening for stocks involves comparing P/B, P/S, and P/E ratios against industry medians, with a focus on stocks with a PEG ratio of less than 1, a current price of at least $5, and a Zacks Rank of 1 or 2 [12][13][14][15] Group 5: Selected Low P/B Stocks - General Motors 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 17.6% 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 [18] - 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]