From Nasdaq: 2024-11-13 15:00:00

Value investors traditionally use the price-to-earnings ratio (P/E) to identify value stocks, but for loss-making companies with negative P/E ratios, the price-to-sales ratio (P/S) or price-to-book ratio (P/B) is considered. P/B is the ratio of stock price to book value, helping pinpoint undervalued stocks like Pfizer, GM, GBX, ITRI, and STNE.

The P/B ratio compares a company’s book value to its market price, indicating if a stock is undervalued (P/B less than 1) or overvalued (P/B greater than 1). However, the ratio has limitations, especially for firms with high debt or negative earnings. It’s essential to consider other ratios like P/E and P/S before making investment decisions.

Screening parameters like P/B, P/S, and P/E ratios compared to industry medians, along with a PEG ratio below 1, can help identify undervalued stocks. Other factors like current price, trading volume, Zacks Rank, and Value Score also play a crucial role in selecting potential investment opportunities.

Among the low price-to-book stocks identified, companies like Pfizer, General Motors, The Greenbrier Companies, Itron, and StoneCo show promising growth prospects with projected 3-5-year EPS growth rates ranging from 10.7% to 25.0%. These stocks have Zacks Ranks and Value Scores indicating their potential for investment.

Experts have distilled 7 elite stocks from Zacks Rank #1 Strong Buys, with a history of outperforming the market by more than 2X. These hand-picked stocks are deemed most likely for early price pops, offering an average gain of +23.7% per year since 1988. Consider these stocks for potential investment opportunities.



Read more at Nasdaq: Buy These 5 Price-to-Book Value Stocks in November