Value investors frequently screen for undervalued stocks using the Price to Book Value (P/BV) ratio.
This screen identifies companies that are valued at a low multiple of the book value of the company’s equity, which may indicate that a stock is undervalued. But there are a few warning signals to watch out for.
Companies with low price to book value ratios may have increased risk, since these companies have historically gone out of business at a higher frequency than higher P/BV stocks. Also, companies that are expected to earn low returns on equity (ROE) are often traded at a low P/BV. In fact, companies can trade below their book value, if you expect the ROE to be less than the cost of equity going forward.
To minimize the risk associated with low P/BV stocks, we’ve developed this screen to identify stocks with low P/BV ratios, and also remove companies that are more risky. We identify risk by using the Altman-Z Score, the Debt to Equity Ratio, Growth Rates, and the quality of growth.
Using the DiscoverCI Stock Screener we scan for stocks daily meeting the following criteria:
The list is sorted by price to book ratios from low to high. Below is our list of low Price to Book ratio stocks to add to your portfolio in 2020.
We update this list daily. Last updated: January 18th, 2020
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