ZACKSยท2025-06-17 14:05Core Insights - Value investing provides an opportunity to acquire overlooked stocks that are trading at low multiples, particularly using the price-to-book (P/B) ratio as a metric for identifying potential bargains with high-growth prospects [1][2] Understanding P/B Ratio - The P/B ratio is calculated as market capitalization divided by book value of equity, helping to identify low-priced stocks with high growth potential [2] - A P/B ratio of less than one indicates that a stock is undervalued, while a ratio greater than one suggests it may be overvalued [5][6] - 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 [8] Screening Parameters - Stocks were screened based on several criteria, including a P/B ratio less than the industry median, a P/S ratio lower than the industry average, and a PEG ratio of less than 1, indicating undervaluation relative to growth prospects [11][12][13] - Additional criteria included a minimum current price of $5, an average 20-day trading volume of at least 100,000, and a Zacks Rank of 1 or 2, which indicates strong buy potential [14] Selected Stocks - Five stocks identified with low P/B ratios and strong projected EPS growth include: - USANA Health Sciences (USNA): Projected 3-5 year EPS growth rate of 12.0%, Zacks Rank 2, Value Score A [15] - CVS Health (CVS): Projected 3-5 year EPS growth rate of 11.4%, Zacks Rank 2, Value Score A [16] - Pfizer (PFE): Projected 3-5 year EPS growth rate of 9.0%, Zacks Rank 2, Value Score A [17] - StoneCo (STNE): Highest projected 3-5 year EPS growth rate at 26.3%, Zacks Rank 1, Value Score B [10][18] - Paysafe Limited (PSFE): Projected 3-5 year EPS growth rate of 17.9%, Zacks Rank 2, Value Score A [19]