5 Low Price-to-Book Value Stocks to Buy as 2024 Draws to a Close

Core Insights - Value investors often use price-to-earnings (P/E) ratio to identify value stocks, but for loss-making companies, price-to-sales (P/S) ratio is more relevant, while price-to-book (P/B) ratio can also help identify low-priced stocks with high returns [1][2] P/B Ratio Overview - The P/B ratio is calculated as market capitalization divided by book value of equity, helping to identify low-priced stocks with high growth prospects [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 [6][7] Book Value Definition - Book value represents the total value left for shareholders if a company were to liquidate its assets after settling all liabilities, calculated by subtracting total liabilities from total assets [4][5] Limitations of P/B Ratio - The P/B ratio is particularly useful for industries like finance and manufacturing but can be misleading for companies with significant R&D expenditures, high debt, or negative earnings [9][10] Screening Parameters for Value Stocks - Stocks with a P/B ratio less than the industry median are considered to have potential for gains [11] - A lower P/S ratio compared to the industry median makes a stock attractive [12] - A P/E ratio (F1) lower than the industry median is viewed favorably [12] - A PEG ratio of less than 1 indicates undervaluation with good growth prospects [13] - Stocks must have a current price of at least $5 and an average 20-day volume of 100,000 for better tradability [14] Notable Low P/B Stocks - General Motors (GM) has a projected 3-5 year EPS growth rate of 12.8% and currently holds a Zacks Rank 2 and a Value Score of A [16][17] - Fresenius Medical Care (FMS) has a projected EPS growth rate of 16.0% and also holds a Zacks Rank 2 and a Value Score of A [17][18] - City Office REIT (CIO) has a projected EPS growth rate of 6.0% and maintains a Zacks Rank 2 and a Value Score of A [18] - TPG RE Finance Trust has a projected EPS growth rate of 33.2%, with a Zacks Rank 1 and a Value Score of B [19] - ZIM Integrated Shipping Services has a projected EPS growth rate of 26.2%, holding a Zacks Rank 1 and a Value Score of A [20]