Carrie Rosen

The price-to-book ratio or P/B ratio is one that investors find useful, although it is quite crude. It compares the market values of stocks to their book values. If a P/B ratio is low, then it is unusually considered to be undervalued. For investors who want to find undervalued stocks then, they often look to this ratio for assistance with the strategy. Three stocks currently with low price-to-book ratios are Noble Corp plc (NYSE:NE), Penn Virginia Corporation (NYSE:PVA), and National Bank of Greece (ADR) (NYSE:NBG).

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For some investors, getting a small return is not acceptable. They want to know the stocks they put money into are going to perform well. A good indication of that value is its trailing performance. An investor can look at rate of growth in relation to its initial value. Growth is usually represented in percentages. Three stocks in the tech industry to keep eyes on this month are CDW Corp (NASDAQ:CDW), Ambarella Inc (NASDAQ:AMBA), and Qlik Technologies Inc (NASDAQ:QLIK).

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Many investors compare stocks to determine values. One form of comparison is the price-to-sales ratio, which is also known as the P/S ratio. It is calculated by multiplying the number of shares by the price per share and then dividing that number by the company’s total sales over the past year. If that P/S ratio is low, then the stock is more favorable in investors’ eyes. Three stocks on the cheap right now are National-Oilwell Varco, Inc. (NYSE:NOV), ArcelorMittal SA (ADR), and Kinross Gold Corporation (USA) (NYSE:KGC).

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One indication of how profitable a company’s assets are at turning a profit is the Return on Assets figure or ROA. It is given in comparison to returns of a similar company to show values or in relation to the company’s previous values. If the assets show a low return, in relation to the industry average, that means the company’s assets are inefficiently used. ROA is typically shown as a percentage. Three stocks that currently show a high return on assets are Lululemon Athletica Inc. (NASDAQ:LULU), Linear Technology Corporation (NASDAQ:LLTC), and Micron Technology, Inc. (NASDAQ:MU).

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ROE or return on equity shows the return generated on a shareholder’s or stockholder’s equity, the book value or the accounting value of shareholder’s or stockholder’s equity. ROE is thought to be the “mother” of all ratios as a company can only generate shareholder value when the ROE rises above its cost of equity capital. Three stocks to look at for ROE right now are Micron Technology, Inc. (NASDAQ:MU), Companhia Energetica Minas Gerais (ADR) (NYSE:CIG), and MGIC Investment Corp. (NYSE:MTG).

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To measure how efficiently a company can manage its assets to create profits, over a specific period of time, investors use the return on assets ratio or ROA. This ratio compares the net income to average total assets.

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