5 Low Price-to-Book Stocks to Add to Your Portfolio in April

Core Viewpoint - The P/B ratio is emerging as a useful tool for identifying undervalued stocks with high growth potential, complementing traditional valuation metrics like P/E and P/S ratios [1][3]. Group 1: Understanding P/B Ratio - The P/B ratio is calculated by dividing the stock's market price by its book value per share, indicating how much investors pay for each dollar of book value [2][6]. - A P/B ratio of less than one suggests that a stock is undervalued, while a ratio greater than one indicates it may be overvalued [6][7]. - The P/B ratio is particularly relevant for industries with tangible assets, such as finance and manufacturing, but may be misleading for companies with high R&D expenditures or significant debt [9][10]. 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 [4][5]. - It is calculated by subtracting total liabilities from total assets, often equating to common stockholders' equity [5]. Group 3: Screening Parameters for Investment - Stocks with a P/B ratio lower than the industry median indicate potential for price appreciation [12]. - A lower P/S ratio compared to the industry average makes a stock more attractive, as it reflects how the market values the company's sales [12]. - A P/E ratio lower than the industry median is considered favorable, suggesting better valuation [13]. - A PEG ratio of less than 1 indicates that a stock is undervalued relative to its growth prospects [14]. - Stocks should have a minimum trading price of $5 and a significant average trading volume to ensure liquidity [15]. Group 4: Examples of Low P/B 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]. - JD.com has a projected EPS growth rate of 32.3% and holds a Zacks Rank of 1 with a Value Score of A [18]. - Pfizer (PFE) has a projected EPS growth rate of 13.8% and a Zacks Rank of 2 with a Value Score of A [19]. - StoneCo (STNE) has a projected EPS growth rate of 21.6% and a Zacks Rank of 1 with a Value Score of B [20]. - EnerSys (ENS) has a projected EPS growth rate of 18.0% and a Zacks Rank of 2 with a Value Score of A [20].