A metric used to compare the market value of a company at the present time to its books value is the price-to-book ratio. That measurement tool is often shortened to P/B ratio. The relative value of a stock is often found by using a P/B ratio formula.
If the stock is underneath 1.0, then it is typically said to be undervalued. Meanwhile, should that number top 1.0, it will be overvalued. Three stocks with low book values currently are Western Refining, Inc. (NYSE:WNR), Targar Resources LP (NYSE:NGLS), and Barnes & Noble, Inc. (NYSE:BKS). The ratio is advantageous for finding value-laden stocks.
Western Refining, Inc. (NYSE:WNR) closed at the end of the last trading session at $43.88. Its P/B ratio is at 3.53, which is significantly less than the industry average at 2.78. The net income for the company has lowered by a rate that is about -26.70% over the past five years. Over this same period, the company’s sales growth has risen by about 17.70% a year.
The last closing price for Targar Resources LP (NYSE:NGLS) per share was at $33.51. It kept its low price-to-book ratio at 1.27; that number is under the industry average at 2.78. The EPS for the company has decreased by about 26.40% over the past five years, while the company’s sales growth (for full year) has stayed at above 13.80% a year, typically.
Barnes & Noble, Inc. (NYSE:BKS) saw a P/B ratio that was 0.92, which was well below the 3.57 industry average. At last trade, it closed at a price per share of $17.89. That gives it a price growth that is at 3.77% so far this year. Over the past five years, the company’s sales have maintained at about 0.90% a year. Meanwhile the company’s earnings per share have declined on average at a rate of -19.70%.