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).
Noble Corp plc (NYSE:NE) closed at last session with a price of $11.67 per share. That price is higher than the -29.57% this far in 2015. The sales have maintained at -2.40% a year (typically) over the last five years. The P/B ratio is 0.44, which is lower than the industry average. The average is at 0.65.
As for Penn Virginia Corporation (NYSE:PVA), it trades at a low P/B ratio; the ratio is 0.18, which is lower than the industry average of 0.52. It is higher than the one-year low when it was $-85.21. Sales growth has moved quickly at 10.00% a year over the last five years, whereas the profit went down by -16.10% a year over that same period of time.
National Bank of Greece (ADR) (NYSE:NBG) closed at last session at a price of $0.850. Over the last five years, its sales have dipped -3.20% a year, with net income going down by an average rate of -67.70%. The price-to-book ratio is at 0.36, which is significantly lower than industry average (2.67).
When a P/B ratio is under 1.0, it typically means the stock is undervalued. When the figure is above 1.0, however, the stock is said to be overvalued usually. The measurement tool is a predictor and thus is not always exact.