balance sheet – Medielys http://medielys.com/ Tue, 15 Mar 2022 15:00:00 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://medielys.com/wp-content/uploads/2021/08/favicon-2-150x150.png balance sheet – Medielys http://medielys.com/ 32 32 Southern Missouri Bancorp: book value increase of more than $4/share per year (NASDAQ: SMBC) https://medielys.com/2022/03/15/southern-missouri-bancorp-book-value-increase-of-more-than-4-share-per-year-nasdaq-smbc/ Tue, 15 Mar 2022 15:00:00 +0000 https://medielys.com/2022/03/15/southern-missouri-bancorp-book-value-increase-of-more-than-4-share-per-year-nasdaq-smbc/ Gwengoat/iStock via Getty Images introduction I’m always interested in finding value in smaller regional banks and it’s too bad Southern Missouri Bancorp (SMBC) doesn’t get more attention here on Seeking Alpha as there has only been one article on this bank for the past 7.5 years. Given the bank’s performance in the first half of […]]]>

Gwengoat/iStock via Getty Images

introduction

I’m always interested in finding value in smaller regional banks and it’s too bad Southern Missouri Bancorp (SMBC) doesn’t get more attention here on Seeking Alpha as there has only been one article on this bank for the past 7.5 years. Given the bank’s performance in the first half of its fiscal year, I believe this regional bank deserves more attention from the investment community.

SMBC Chart

Yahoo finance

A rather strong result in the first half bodes well for the future

Southern Missouri has seen its earnings profile improve in recent quarters as interest income increases while interest expense declines. This translates into higher net interest income and in the first half, SMBC saw its net interest income increase by more than 10% to $50.7 million.

income statement

SMBC Investor Relations

The bank reported total non-interest income of $9.8 million and non-interest expense of $29.3 million, resulting in net non-interest expense of $19.5 million. This means that the provision for pre-tax and pre-loan losses in the first half was about $31 million. Southern Missouri Bancorp was also able to write off just over $0.3 million of previously recorded loan loss provisions, boosting reported pretax profit to $31.5 million and resulting in a net income of $24.7 million, or $2.78 per share.

The second quarter was relatively weaker than the first quarter, with EPS declining from $1.43 to $1.35 due to slightly lower net interest income and no provision reversal of 0 $.3 million which was fully recorded in the first quarter of the year.

Southern Missouri pays only a nominal dividend and the $0.20 per share on a quarterly basis represents a dividend yield of just over 1.5%. That means Southern Missouri isn’t exactly a good fit for an income-focused portfolio, but it also means the dividend is extremely safe. The payout ratio in the first half was below 15%, and even in the weaker second quarter of the year the payout ratio did not exceed 15%. Low yield, but sure yield.

I like exposure to residential real estate

When I look at these regional banks, I’m always keen to see what the asset side of the balance sheet looks like. As explained in a previous article on PCB Bancorp, I don’t necessarily mind higher exposure to, say, commercial real estate as long as LTV ratios are reasonable as a local bank may have a better view of the local real estate market .

On the asset side of the balance sheet

SMBC Investor Relations

Looking at Southern Missouri’s balance sheet, of the $2.92 billion in total assets, about $400 million was in fairly safe assets with nearly $185 million in cash and over $200 million in securities that are supposed to be rather liquid. I mainly want to zoom in on the $2.36 billion loan book to see the breakdown.

Breakdown of loan portfolio

SMBC Investor Relations

I was pleasantly surprised to see that about a third of the loan portfolio consists of residential real estate and another 40% is focused on commercial real estate loans. This should not be a deterrent as the most important factor here is to see what percentage of the loan portfolio is outstanding and what percentage of the loans are past due.

Lending book quality

SMBC Investor Relations

According to footnotes to the financial statements, Southern Missouri Bancorp customers appear to be making their payments on time. Of the total loan portfolio size of nearly $2.4 billion, only $3.3 billion of loans are classified as delinquent. This means that 99.85% of loans are performing, but it also means that the total amount of more than $30 million recorded for future loan losses is more than enough to cover potential problems here. It also explains why Southern Missouri was able to write off some of the historical loan loss provisions because its loan loss provision is high enough to cover current potential issues. There is, however, a point of caution here: under the CARES Act, some borrowers have been allowed to suspend payments due to the impact of COVID-19. That doesn’t mean these borrowers are insolvent because they’re just taking advantage of an opportunity offered by the government, but at the end of 2021, Southern Missouri had $23.7 million in loans that were modified under of the CARES Act. These loans are currently flagged as outstanding, but once the grace period ends, some of these loans may need to be reclassified as past due after a period of time.

Investment thesis

I don’t currently have a long position in Southern Missouri Bancorp, but the bank is definitely on my watch list. The tangible book value per share is currently around $31.5, which means the bank is trading at around 1.6 times its tangible book value, but since the bank retains most of its earnings, the book value tangible book value per share increases by more than $4/year and by the end of calendar year 2023, I expect the tangible book value to exceed $40/share.

Trading at less than 10x earnings and seeing very few loans in arrears, Southern Missouri Bancorp piqued my interest. I noticed there are options available on SMBC so I might try to write an out of the money put on southern Missouri but options are pretty illiquid there isn’t therefore has no guarantee that an order will be affected.

So for now, I’m on the sidelines but I can’t wait to see how the “new” entity after completing the acquisition of Fortune Financial will perform. This was a very small transaction, but will add approximately $250 million to the balance sheet assets.

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What is book value per share (BVPS)? https://medielys.com/2022/01/19/what-is-book-value-per-share-bvps/ Wed, 19 Jan 2022 08:00:00 +0000 https://medielys.com/2022/01/19/what-is-book-value-per-share-bvps/ When you buy stock in a company, you are buying an equity stake. The value of this equity stake will change over time: it will rise and fall with the performance of the business. Much of it comes down to market sentiment: what someone else is willing to pay for that stake if you choose […]]]>

When you buy stock in a company, you are buying an equity stake. The value of this equity stake will change over time: it will rise and fall with the performance of the business. Much of it comes down to market sentiment: what someone else is willing to pay for that stake if you choose to sell. Investors who want a clear and unbiased valuation of their holding use metrics such as book value per share (BVPS) to fundamentally understand what it’s worth.

Book value per share represents the intrinsic value of a share of a company. If this company closed and was liquidated tomorrow, the BVPS is what each shareholder would receive as payment for their equity stake. This is an important number to know because, used as a benchmark, it can show how much the current stock is undervalued or overvalued by the market.

Here’s a deeper dive into book value per share, how to calculate it, what it means, and how to use it as a valuation measure to understand stock prices.

How to calculate book value per share

To understand book value per share, investors need to look at the company’s balance sheet. Specifically, represented equity (total equity minus preferred equity). Divide this equity by the total number of shares outstanding to get the BVPS price:

BVPS = Total Equity / Total Outstanding Shares

For example, if Company ABC has $750 million in equity on its balance sheet and total shares outstanding of 50 million, its BVPS is $15. This is the amount that each shareholder would receive after the company is liquidated and its debts paid. Note that preferred stockholders’ equity is not included in this calculation because such stockholders receive a prior claim in the event of liquidation.

At a glance: High or low book value per share

Investors using book value as a valuation measure, we look at how much above or below the current market value per share. BVPS is a useful benchmark for determining whether a stock is undervalued or overvalued by the market, and by how much. This is usually accomplished through comparative metrics such as the book-to-market ratio.

  • If the book value is lower than the market value, it is an overvalued signal.
  • If the book value is higher than the market value, it is an undervalued signal.
  • The higher or lower the book price is than the market value, the stronger the signal.

For example, if Company ABC’s BVPS is $15 and its market value is $30, investors might conclude that the market is overvaluing the stock by 100%. Likewise, if BVPS is $15 and the current price is $14, it is very slightly undervalued and could be a good value play.

BVPS vs Current Market Share Price

More often than not, a company’s book value per share will differ significantly from its current price, which is usually more expensive. A market share price above the BVPS indicates that investors are bullish on the company. They are willing to pay a premium above the current value of equity per share because they believe equity will soon increase as the business grows.

It is important to recognize that a higher market share does not necessarily mean that the company is overvalued. Because BVPS only looks balance sheet equity, it does not take into account intangible assets that have an impact on the company’s future sales and income. Comparing BVPS to the current stock price in the market is simply a way to put the stock price into context.

There are occasions when BVPS may be higher than the current stock price. These examples indicate bearish sentiment. Investors feel that the company is going to have a hard time and believe that equity will decline. For example, if a company faces protracted litigation that disrupts business operations, its stock price may be lower than the book value per share. Sometimes it signals a valuable investment.

How can companies increase BVPS?

There are three main ways companies can increase book value per share. Some occur naturally as a result of business growth; others are specific actions a company could use to tighten its financial position.

  • Increase assets. The more assets on a company’s balance sheet, the higher the BVPS due to the increase in common stock. This is the most common way for businesses to grow BVPS, as they naturally add assets as the business grows.
  • Reduce liabilities. In the same way, adding assets to the balance sheet increases the BVPS, reducing liabilities achieves the same result. It can also happen as a natural function of business growth as businesses pay off old debts.
  • Share buybacks. Reducing the total number of shares available drives up the company’s BVPS by strengthening the equity of outstanding shares. This usually happens after positive gains.

All of these strategies to increase BVPS revolve around strong profits. Businesses must have a healthy cash flow to bring in cash that is used to increase assets, reduce liabilities, or buy back stock.

Know the true value of your stock position

Although the price value of a stock changes every minute of every trading period based on investor sentiment and market conditions, it is still important to understand the book value per share. It’s the true value of your participation: the bare minimum of its value.

BVPS will tell you how much premium the company’s stock is trading for and may influence your thesis as to whether it’s a good addition to your portfolio. Remember that this is a static indicator and not forward-looking. Although it represents value, it does not take into account a company’s equity potential.


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Hannon Armstrong Sustainable Infrastructure Stock: Unsustainable premium to book value https://medielys.com/2022/01/12/hannon-armstrong-sustainable-infrastructure-stock-unsustainable-premium-to-book-value/ Wed, 12 Jan 2022 18:23:00 +0000 https://medielys.com/2022/01/12/hannon-armstrong-sustainable-infrastructure-stock-unsustainable-premium-to-book-value/ LeoPatrizi/E+ via Getty Images Hannon Armstrong (NYSE:HASI) is a mortgage REIT that provides financing for various types of green projects. They were one of the first to go into space and they are very good at it. I like the business and think there are many opportunities in green finance. Unfortunately, the valuation of HASI […]]]>

LeoPatrizi/E+ via Getty Images

Hannon Armstrong (NYSE:HASI) is a mortgage REIT that provides financing for various types of green projects. They were one of the first to go into space and they are very good at it. I like the business and think there are many opportunities in green finance. Unfortunately, the valuation of HASI is excessively high, so it is actually a dangerous investment.

The Sell thesis

The nature of the mREIT business is such that the market price must always be anchored approximately around book value. The market seems to have gotten caught up in the excitement of HASI’s environmental talk and has forgotten the basics of mREIT valuation. HASI is trading at 3.13 times its book value. In this article, I intend to show that even though their investments perform extremely well, there is no reasonable outcome in which they are worth HASI’s market capitalization.

It’s not about whether they are good investments. Even with extremely optimistic forecasts, they simply cannot be worth 3.13 times the book. It is a matter of the structure being such that their value is capped.

Book value and REITs

Book value is a tricky concept with REITs. For equity REITs, this is an almost meaningless metric because properties are depreciated to 0 on the balance sheet, making the book value in no way reflective of the true value of the asset. .

Mortgage REITs are different. Loans are usually carried at face value or some measure of fair value, with companies often reporting both. Face value and fair value are useful measures for mREITs and provide an excellent guide for valuation.

mREIT anchored near book value

There are different types of mREITs such as agency mREITs, CRE mREITs, and private equity style mREITs, but they all have one thing in common: a valuation peg at approximately book value.

In fact, mREITs used to be part of the financial industry until they were phased out along with equity REITs in the 11e GICS sector.

These non-bank lenders all tend to trade around book value as shown below

Company (symbol)

To preserve

AGNC Investment (AGNC)

0.90

Annaly Capital (NLY)

0.98

New Residential Investment Company (NRZ)

0.99

Two ports (TWO)

0.92

Chimera (CIM)

0.94

Blackstone Mortgage Trust (BXMT)

1.16

KKR Real Estate Financing (NYSE: KREF)

1.11

Capital Loan (RC)

1.12

Data from SNL Financial

The list above includes both large and small companies as well as those with excellent reputations and those that have made mistakes.

Why such uniformity of valuation despite great differences between companies?

Well, there is an underlying mechanism that anchors a lender’s value to book value and it’s quite simple.

Loans tend to recoup the capital invested plus interest. The interest is proportional to the risk level of the loan. So, by lending $1,000, you recover a risk of $1,000 plus interest which has a risk-adjusted present value of about $1,000. Loans can go horribly wrong so you get $0 back, but there is no mechanism by which a loan can be a home run.

If the loan goes perfectly, you only get back the capital plus interest.

Given this capped return, it would be pretty silly to pay $3,000 for the receivables stream of a $1,000 loan and yet that’s what happens with HASI.

Unrealistic HASI valuation

Here is the Vital Statistics form on which I am basing this argument

Graphical user interface, table Description automatically generated with medium confidence

Statistics

SNL Financial

Thus, the enterprise value shown above of $6.5 billion offsets the cash and cash equivalents of the $2.467 billion in liabilities plus $4.561 billion in market capitalization. This means that to justify the current valuation, the assets, including cash, must be worth just over $7 billion.

Now let’s take a look at the strengths of the business.

Background pattern Description automatically generated

Balance sheet

10-Q

Assets of $3.9 billion are quite a far cry from the $7 billion. Let’s dig into the major line items to see if any of them might be worth much more than they carry on the balance sheet.

  • $413 million of cash and cash equivalents is worth $413 million.

The other significant items are receivables and equity investments using the equity method.

To estimate the real value of these, we need to know how HASI accounts for them. Here is their description of the 10-Q

“Investments are debt securities that meet the criteria of ASC 320, Investments – Debt and equity securities. We have designated our debt securities as available for sale and carry these securities at fair value on our balance sheet.

HASI also provided the following table:

Background pattern Description automatically generated

HASI Investments

HASI

Source: 10-Q

If the loans perform perfectly, they would functionally recover that $39 million loss provision. Even still, that brings it to just over $1.4 billion.

We should also attribute some value to embedded interest payments. A HASI bull might argue that since many of these loans are functionally super senior within the debtor’s capital stack, the level of risk is very low compared to the 5%+ interest rates on these loans. .

As such, HASI got a better deal than the market and so there would be a positive risk-adjusted present value on the interest payments.

I think there is some validity to this argument, but there is also risk on the other side with long-term, fixed-rate interest payments in a rising rate environment.

The 10-year Treasury yield just hit 1.668% and is expected to rise with the Fed’s tapering and hikes coming later this year.

Overall I think HASI is getting a better than average deal on their loan book so one could spot the fair value a bit higher than the balance sheet but the difference would be in the tens of millions, not in the hundreds of millions.

As such, the loan portion of HASI fits the mREIT profile perfectly in that it must be firmly anchored to book value.

A little more leeway in investments using the equity method

Equity investments, as opposed to loan investments, may fluctuate somewhat more in value with the performance of the underlying asset. As such, if there is a bucket in which HASI’s book value underestimates the actual value, this would be it.

As of 9/30/21, HASI held $1.468 billion in investments under the equity method. Here is how HASI counts them:

“Our investments in renewable energy or energy efficiency projects are accounted for using the equity method. Under the equity method, the carrying value of these equity-accounted investments is determined based on the amounts we have invested, adjusted for equity in the profit or loss of the investee allocated based on the LLC agreement, less distributions received.

In short, they are recorded at cost with cash flow type adjustments. Thus, the delta between the real value and the book value of this item would be the change in the fair value of the instrument beyond the cash flows it generated.

So, let’s look at investments using the equity method.

Automatically generated table description

Investments under the equity method

HASI

The largest is Jupiter Equity Holdings, a company that owns nine operating wind farms producing about 2.3 gigawatts. HASI contributed $540 million to the project in July 2020.

It was a good time to build renewables because the performance metrics look solid. This deal is made more secure with power supply deals already under long-term contract, so I suspect it will cash in well. That said, there are two factors that I believe limit how much this could have appreciated beyond book value:

  1. July 2020 is not that far away.
  2. HASI has a preferred interest in the project rather than a common tranche. Thus, its cash flow is more secure, but the upside is also reduced.

Lighthouse Partnerships is a similar investment in that HASI holds a preferred tranche in a large solar and wind project. HASI’s total investment is expected to be $663 million, but as of 9/30/21, only $219 million has been invested.

This too looks like a lucrative investment, but it is still in its infancy. Given recency and prime tier, I suspect fair value is only slightly north of invested capital.

HASI does everything right and every investment it makes seems to be relevant. I particularly like how they structure their trades so that they are so high in the capital stack that their returns are near AA caliber.

Even their equity investments are structured with a preferential yield which greatly increases HASI’s chances of profitability in the companies.

It’s a conservative company with the expertise in green financing to get the right deals with the right partners. I strongly believe that they will consistently generate strong IRR at relatively low risk. If the company was trading at around book value, I’d be happy to stock up on stocks.

A simple case of overvaluation

The challenge with HASI’s current valuation at 3.13X Pound is that given the conservative nature of their investments, it is absurd to value them so highly. A conservative lender simply cannot triple their money in just a few years.

On each of the HASI investments that I have reviewed, I believe they got a good deal, making the present value of these investments perhaps 10% or even 20% greater than their invested capital.

As such, the $7 billion valuation is absurd. Given that the capital has been so well invested, I think the $3.2 billion invested by HASI as of 9/30/21 is probably worth around $3.6 billion. Adding the $413 million in cash and cash equivalents, I would see the asset value at $4.13 billion.

Don’t pay $7 billion for $4.13 billion

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Buy these 5 price-to-book stocks in 2022 for gains https://medielys.com/2022/01/07/buy-these-5-price-to-book-stocks-in-2022-for-gains/ Fri, 07 Jan 2022 14:09:00 +0000 https://medielys.com/2022/01/07/buy-these-5-price-to-book-stocks-in-2022-for-gains/ Value investors have, over the years, favored the price / earnings or P / E ratio as a way to identify value stocks. However, in the case of loss-making companies that have a negative price-to-earnings ratio, the price-to-sales or P / S ratio is taken into account to determine their true value. However, the price-to-book […]]]>

Value investors have, over the years, favored the price / earnings or P / E ratio as a way to identify value stocks. However, in the case of loss-making companies that have a negative price-to-earnings ratio, the price-to-sales or P / S ratio is taken into account to determine their true value.

However, the price-to-book ratio (P / N ratio), while used less often, is also an easy-to-use valuation tool for identifying low-priced stocks with good returns.

The P / B ratio is calculated as below:

P / B ratio = market capitalization / book value of equity

The P / B ratio helps identify low-priced stocks that have high growth prospects. Ford Motor Company F, General Motors Society DG, Invesco IVZ, DXC Technology Company DXC and Atlas Corp. ATCO are just a few of those choices.

What is book value?

There are several ways to define the book value. Book value is the total value that would remain, according to the company’s balance sheet, in the event of immediate bankruptcy. In other words, this is what shareholders would theoretically receive if a company liquidated all of its assets after paying off all of its liabilities.

It is calculated by subtracting total liabilities from total assets of a business. In most cases, this is equivalent to common shareholders’ equity on the balance sheet. However, according to the company’s balance sheet, intangible assets must also be subtracted from total assets to determine the book value.

Understanding the P / B Ratio

By comparing the book value of equity to its market price, we get an idea of ​​whether a company is undervalued or overvalued. However, like the P / E or P / S ratio, it is always best to compare P / N ratios within industries.

An AP / E ratio of less than one means the stock is trading below its book value or the stock is undervalued and therefore is a good buy. Conversely, a stock with a ratio greater than one can be interpreted as being overvalued or relatively expensive.

For example, a stock with a P / N ratio of 2 means we pay $ 2 for every $ 1 of book value. Thus, the higher the P / B, the more expensive the action.

But there is a caveat. An AP / E ratio of less than one can also mean that the company is generating low or even negative returns on its assets or that the assets are overvalued, in which case the stock should be avoided as it can destroy shareholder value. Conversely, the share price can be significantly high – thus pushing the P / B ratio to more than one – in the probable event that it has become a takeover target, reason enough to hold the share. ‘action.

In addition, the P / B ratio is not without limits. It is useful for businesses – like finance, investment, insurance, and banking or manufacturing companies – with many liquid / tangible assets on the books. However, this can be misleading for companies with large R&D spending, high debt, service companies, or those with negative profits.

In any case, the ratio is not particularly relevant as a stand-alone number. One should analyze other ratios such as P / E, P / S and debt / equity before making a reasonable investment decision.

Screening parameters

Price to Book (Common Equity) below the X-Industry median: A lower P / B than the industry average implies that there is enough room for the stock to win.

Sales price below the X-Industry median: The P / S ratio determines the market value for every dollar of the company’s sales / revenue – a lower ratio than the industry makes the stock attractive.

Price / profit using an F (1) estimate lower than the X-Industry median: The P / E (F1) ratio values ​​a company based on its current stock price relative to its estimated earnings per share – a lower ratio than the industry is considered better.

PEG less than 1: The PEG relates the P / E ratio to the company’s future growth rate. The PEG ratio gives a more complete picture than the P / E ratio. A value less than 1 indicates that the stock is undervalued and that investors should pay less for a stock that has good prospects for earnings growth.

Current price greater than or equal to $ 5: They must all trade at a minimum of $ 5 or more.

Average volume over 20 days greater than or equal to 100,000: A substantial trading volume ensures that the stock is easily tradable.

Rank of Zacks less than or equal to # 2: Zacks Rank # 1 (Strong Buy) or 2 (Buy) stocks are known to outperform regardless of the market environment.

Value Note Equal to A or B: Our research shows that stocks with a value score of A or B, when combined with a Zacks # 1 or 2 ranking, offer the best opportunities in the value investing space.

Here are our five choices among the 12 actions that qualified the screening:

Ford Motor Company designs, manufactures, markets and services Lincoln cars, trucks, sport utility vehicles, electrified vehicles and luxury vehicles.

Ford Motor has a projected 3 to 5 year EPS growth rate of 24.7%. Ford Motor currently has a Zacks # 1 ranking and a value score of A. You can see The full list of today’s Zacks # 1 Rank stocks here.

Invesco acts as an independent investment manager and offers a wide range of investment products and services. As of September 30, 2021, Invesco had offices in more than 20 countries and assets under management worth $ 1.53 trillion.

Invesco currently has a Zacks Rank # 2 and a Value Score of A. Invesco has a projected 3 to 5 year EPS growth rate of 13.5%.

General Motors Company is one of the largest automobile manufacturers in the world. The leading U.S. automaker aims to spend more than $ 27 billion by 2025 to launch next-generation electric vehicles powered by new, low-cost batteries. General Motors plans to roll out 11 new electric vehicles as part of its ambitious plans through 2025, including at least 20 new models by 2023.

General Motors has a Zacks Rank # 2 and a Value Score of A. Celestica has a 3 to 5 year projected EPS growth rate of 9.9%.

DXC Technology Company provides information technology services and solutions primarily in North America, Europe, Asia and Australia. DXC Technology Company has a Zacks Rank # 2 and a Value Score of A.

DXC Technology Company was formed by the amalgamation of Computer Sciences Corporation (“CSC”) and the Enterprise Services Division of Hewlett Packard Enterprise (“HPE”), which was completed on April 1, 2017. DXC Technology Company a a forecast of 3-5- annual EPS growth rate of 27.4%.

Atlas Corp. is an asset management company, which operates as an independent owner and manager of container ships.

Atlas Corp. has a projected 3 to 5 year EPS growth rate of 27.9%. Atlas Corp. currently has a Zacks Rank # 1 and a Value Score of A.

Get the rest of the actions on the list and start testing this idea and others. All of this can be done with Research Wizard stock picking and backtesting software.

The Research Assistant is a great place to start. It’s easy to use. Everything is in plain language. And it’s very intuitive. Start your research assistant trial today. And the next time you read an economic report, open the research assistant, plug in your findings, and see what gems come out of it.

Click here to sign up for a free trial of the Research Assistant today.

Disclosure: Officers, directors and / or employees of Zacks Investment Research may own or have sold securities short and / or hold long and / or short positions in options mentioned in this document. An affiliated investment advisory firm may own or have sold securities short and / or hold long and / or short positions in options mentioned in this document.

Disclosure: Information on the performance of Zacks’ portfolios and strategies can be found at: https://www.zacks.com/performance

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Zacks investment research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Buy These 5 Stock Price / Book Value in 2022 for Gains – January 7, 2022 https://medielys.com/2022/01/07/buy-these-5-stock-price-book-value-in-2022-for-gains-january-7-2022/ Fri, 07 Jan 2022 13:33:10 +0000 https://medielys.com/2022/01/07/buy-these-5-stock-price-book-value-in-2022-for-gains-january-7-2022/ [ad_1] Value investors have, over the years, favored the price / earnings or P / E ratio as a way to identify value stocks. However, in the case of loss-making companies that have a negative price-to-earnings ratio, the price-to-sales or P / S ratio is taken into account to determine their true value. However, the […]]]>


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Value investors have, over the years, favored the price / earnings or P / E ratio as a way to identify value stocks. However, in the case of loss-making companies that have a negative price-to-earnings ratio, the price-to-sales or P / S ratio is taken into account to determine their true value.

However, the price-to-book ratio (P / N ratio), while used less often, is also an easy-to-use valuation tool for identifying low-priced stocks with good returns.

The P / B ratio is calculated as below:

P / B ratio = market capitalization / book value of equity

The P / B ratio helps identify low-priced stocks that have high growth prospects. Ford Motor Company (F Free report), General Motors Society (DG Free report), Invesco (IVZ Free report), DXC Technology Company (DXC Free report) and Atlas Corp. (ATCO Free Report) are just a few of those choices.

What is book value?

There are several ways to define the book value. Book value is the total value that would remain, according to the company’s balance sheet, in the event of immediate bankruptcy. In other words, this is what shareholders would theoretically receive if a company liquidated all of its assets after paying off all of its liabilities.

It is calculated by subtracting total liabilities from total assets of a business. In most cases, this is equivalent to common shareholders’ equity on the balance sheet. However, according to the company’s balance sheet, intangible assets must also be subtracted from total assets to determine the book value.

Understanding the P / B Ratio

By comparing the book value of equity to its market price, we get an idea of ​​whether a company is undervalued or overvalued. However, like the P / E or P / S ratio, it is always best to compare P / N ratios within industries.

An AP / E ratio of less than one means the stock is trading below its book value or the stock is undervalued and therefore is a good buy. Conversely, a stock with a ratio greater than one can be interpreted as being overvalued or relatively expensive.

For example, a stock with a P / N ratio of 2 means we pay $ 2 for every $ 1 of book value. Thus, the higher the P / B, the more expensive the action.

But there is a caveat. An AP / E ratio of less than one can also mean that the company is generating low or even negative returns on its assets or that the assets are overvalued, in which case the stock should be avoided as it can destroy shareholder value. Conversely, the share price can be significantly high – thus pushing the P / B ratio to more than one – in the probable event that it has become a takeover target, reason enough to hold the share. ‘action.

In addition, the P / B ratio is not without limits. It is useful for businesses – like finance, investment, insurance, and banking or manufacturing companies – with many liquid / tangible assets on the books. However, this can be misleading for companies with large R&D spending, high debt, service companies, or those with negative profits.

In any case, the ratio is not particularly relevant as a stand-alone number. One should analyze other ratios such as P / E, P / S and debt / equity before making a reasonable investment decision.

Screening parameters

Price to Book (Common Equity) below the X-Industry median: A lower P / B than the industry average implies that there is enough room for the stock to win.

Sales price below the X-Industry median: The P / S ratio determines the market value for every dollar of the company’s sales / revenue – a lower ratio than the industry makes the stock attractive.

Price / profit using an F (1) estimate lower than the X-Industry median: The P / E (F1) ratio values ​​a company based on its current stock price relative to its estimated earnings per share – a lower ratio than the industry is considered better.

PEG less than 1: The PEG relates the P / E ratio to the company’s future growth rate. The PEG ratio gives a more complete picture than the P / E ratio. A value less than 1 indicates that the stock is undervalued and that investors should pay less for a stock that has good prospects for earnings growth.

Current price greater than or equal to $ 5: They must all trade at a minimum of $ 5 or more.

Average volume over 20 days greater than or equal to 100,000: A substantial trading volume ensures that the stock is easily tradable.

Rank of Zacks less than or equal to # 2: Zacks Rank # 1 (Strong Buy) or 2 (Buy) stocks are known to outperform regardless of the market environment.

Value Score Equal to A or B: Our research shows that stocks with a value score of A or B, when combined with a Zacks # 1 or 2 ranking, offer the best opportunities in the investment space. valuable.

Here are our five choices among the 12 actions that qualified the screening:

Ford Motor Company designs, manufactures, markets and services Lincoln cars, trucks, sport utility vehicles, electrified vehicles and luxury vehicles.

Ford Motor has a projected 3 to 5 year EPS growth rate of 24.7%. Ford Motor currently has a Zacks Rank # 1 and Value Score of A. You can see the full list of Zacks # 1 Rank stocks today here.

Invesco acts as an independent investment manager and offers a wide range of investment products and services. As of September 30, 2021, Invesco had offices in more than 20 countries and assets under management worth $ 1.53 trillion.

Invesco currently has a Zacks Rank # 2 and a Value Score of A. Invesco has a projected 3 to 5 year EPS growth rate of 13.5%.

General Motors Company is one of the largest automobile manufacturers in the world. The leading U.S. automaker aims to spend more than $ 27 billion by 2025 to launch next-generation electric vehicles powered by new, low-cost batteries. General Motors plans to roll out 11 new electric vehicles as part of its ambitious plans through 2025, including at least 20 new models by 2023.

General Motors has a Zacks Rank # 2 and a Value Score of A. Celestica has a 3 to 5 year projected EPS growth rate of 9.9%.

DXC Technology Company provides information technology services and solutions primarily in North America, Europe, Asia and Australia. DXC Technology Company has a Zacks Rank # 2 and a Value Score of A.

DXC Technology Company was formed by the amalgamation of Computer Sciences Corporation (“CSC”) and the Enterprise Services Division of Hewlett Packard Enterprise (“HPE”), which was completed on April 1, 2017. DXC Technology Company a a forecast of 3-5- annual EPS growth rate of 27.4%.

Atlas Corp. is an asset management company, which operates as an independent owner and manager of container ships.

Atlas Corp. has a projected 3 to 5 year EPS growth rate of 27.9%. Atlas Corp. currently has a Zacks Rank # 1 and a Value Score of A.

Get the rest of the actions on the list and start testing this idea and others. All of this can be done with Research Wizard stock picking and backtesting software.

The Research Assistant is a great place to start. It’s easy to use. Everything is in plain language. And it’s very intuitive. Start your research assistant trial today. And the next time you read an economic report, open the research assistant, plug in your findings, and see what gems come out of it.

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Disclosure: Officers, directors and / or employees of Zacks Investment Research may own or have sold securities short and / or hold long and / or short positions in options mentioned in this document. An affiliated investment advisory firm may own or have sold securities short and / or hold long and / or short positions in options mentioned in this document.

Disclosure: Information on the performance of Zacks’ portfolios and strategies can be found at: https://www.zacks.com/performance

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Buy These 5 Price-to-Book Value Stocks in 2022 for Gains https://medielys.com/2022/01/07/buy-these-5-price-to-book-value-stocks-in-2022-for-gains/ Fri, 07 Jan 2022 08:00:00 +0000 https://medielys.com/2022/01/07/buy-these-5-price-to-book-value-stocks-in-2022-for-gains/ Value investors have over the years preferred the price-to-earnings or P/E ratio as a way to identify value-oriented stocks. However, in the case of loss-making companies that have a negative price-to-earnings ratio, the price-to-sales or P/S ratio is taken into account to determine their true value. However, the price-to-book ratio (P/B ratio), although used less […]]]>

Value investors have over the years preferred the price-to-earnings or P/E ratio as a way to identify value-oriented stocks. However, in the case of loss-making companies that have a negative price-to-earnings ratio, the price-to-sales or P/S ratio is taken into account to determine their true value.

However, the price-to-book ratio (P/B ratio), although used less often, is also an easy-to-use valuation tool for identifying low-priced stocks with excellent returns.

The P/B ratio is calculated as follows:

P/B ratio = market capitalization / book value of equity

The P/B ratio helps identify low-priced stocks that have high growth prospects. Ford Motor Company F, General Motors Society GM, Invesco IVZ, DXC Technology Company DXC and Atlas Corp. ATCO are some of those choices.

What is the book value?

There are several ways to define book value. Book value is the total value that would remain, according to the company’s balance sheet, if it went bankrupt immediately. In other words, it’s what shareholders would theoretically receive if a company liquidated all of its assets after settling all of its liabilities.

It is calculated by subtracting the total liabilities from the total assets of a business. In most cases, this equates to common shareholders’ equity on the balance sheet. However, according to the company’s balance sheet, intangible assets must also be subtracted from total assets to determine book value.

Understanding the P/B ratio

By comparing the book value of equity to its market price, we get an idea if a company is undervalued or overvalued. However, like the P/E or P/S ratio, it is always best to compare P/B ratios within industries.

An AP/B ratio of less than one means the stock is trading at a price below its book value, or the stock is undervalued and therefore a good buy. Conversely, a stock with a ratio greater than one can be interpreted as being overvalued or relatively expensive.

For example, a stock with a P/B ratio of 2 means we pay $2 for every $1 of book value. Thus, the higher the P/B, the more expensive the stock.

But there is a caveat. An AP/B ratio of less than one can also mean that the company is getting low or even negative returns on its assets or that the assets are overvalued, in which case the stock should be avoided as it can destroy shareholder value. Conversely, the stock price can be significantly high – thus pushing the P/B ratio to more than one – in the likely event that it has become a buyout target, reason enough to hold the stock. .

Moreover, the P/B ratio is not without limits. It is useful for businesses – like finance, investments, insurance and banking or manufacturing companies – with many liquid/tangible assets on the books. However, this can be misleading for companies with large R&D expenses, high debt, service companies, or those with negative earnings.

In any case, the ratio is not particularly relevant as a stand-alone number. Other ratios such as P/E, P/S and debt/equity should be analyzed before making a reasonable investment decision.

Screening Parameters

Price to Book (common Equity) below the X-Industry median: A lower P/B relative to the industry average implies that there is enough room for the stock to win.

Selling price below median X-Industry: The P/S ratio determines how much the market values ​​each dollar of the company’s sales/revenue – a lower ratio than the industry makes the stock attractive.

Price/earnings ratio using F(1) estimate below industry median X: The P/E (F1) ratio values ​​a company based on its current share price relative to its estimated earnings per share – a lower ratio than the industry is considered better.

PEG less than 1: The PEG relates the P/E ratio to the future growth rate of the company. The PEG ratio gives a more complete picture than the P/E ratio. A value below 1 indicates the stock is undervalued and investors should pay less for a stock that offers good earnings growth prospects.

Current price greater than or equal to $5: They must all trade at a minimum of $5 or more.

Average volume over 20 days greater than or equal to 100,000: Substantial trading volume ensures that the stock is easily tradable.

Zacks rating less than or equal to #2: Zacks Rank #1 (Strong Buy) or 2 (Buy) stocks are known to outperform regardless of the market environment.

Value Score of A or B: Our research shows that stocks with a Value Score of A or B, when combined with a Zacks #1 or 2 ranking, offer the best opportunities in the investment space valuable.

Here are our five picks from the 12 stocks that qualified the selection:

Ford Motor Company designs, manufactures, markets and services Lincoln cars, trucks, sport utility vehicles, electrified vehicles and luxury vehicles.

Ford Motor forecasts an EPS growth rate of 24.7% over 3 to 5 years. Ford Motor currently has a Zacks Rank #1 and a Value Score of A. You can see the full list of today’s Zacks Rank #1 stocks here.

Invesco operates as an independent investment manager and offers a wide range of investment products and services. As of September 30, 2021, Invesco had offices in over 20 countries and an AUM worth $1.53 trillion.

Invesco currently has a Zacks No. 2 ranking and a value score of A. Invesco has an expected EPS growth rate of 13.5% over 3-5 years.

General Motors Company is one of the largest automobile manufacturers in the world. The top US automaker aims to spend more than $27 billion through 2025 to launch next-generation electric vehicles powered by new low-cost batteries. General Motors plans to roll out 11 new electric vehicles as part of its ambitious plans through 2025, including at least 20 new models by 2023.

General Motors has a Zacks rank of No. 2 and a value score of A. Celestica has an expected 3-5 year EPS growth rate of 9.9%.

DXC Technology Company provides information technology services and solutions primarily in North America, Europe, Asia and Australia. DXC Technology Company has a Zacks Rank #2 and a Value Score of A.

DXC Technology Company was formed by the merger of Computer Sciences Corporation (“CSC”) and the business services division of Hewlett Packard Enterprise (“HPE”), which was completed on April 1, 2017. DXC Technology Company has a forecast of 3-5-year EPS growth rate of 27.4%.

Atlas Corp. is an asset management company, which operates as an independent charterer and manager of container ships.

Atlas Corp. forecast an EPS growth rate of 27.9% over 3 to 5 years. Atlas Corp. currently has a Zacks rank #1 and a value score of A.

Get the rest of the stocks on the list and start testing this idea and others. All of this can be done with Research Wizard stock picking and back testing software.

The research assistant is a great starting point. It’s easy to use. Everything is in plain language. And it’s very intuitive. Start your search assistant trial today. And the next time you’re reading an economic report, open up the research assistant, plug in your findings, and see what gems come out.

Click here to sign up for a free trial of Research Assistant today.

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold securities short and/or hold long and/or short positions in the options mentioned herein. An affiliated investment advisory firm may hold or have shorted securities and/or hold long and/or short positions in options mentioned herein.

Disclosure: Information on the performance of Zacks portfolios and strategies is available at: https://www.zacks.com/performance

Want the latest recommendations from Zacks Investment Research? Today you can download 7 best stocks for the next 30 days. Click to get this free report

Ford Motor Company (F): Free Inventory Analysis Report

Invesco Ltd. (IVZ): Free Stock Analysis Report

General Motors Company (GM): Free Inventory Analysis Report

DXC technology company. (DXC): Free Stock Analysis Report

Atlas Corp. (ATCO): Free Inventory Analysis Report

To read this article on Zacks.com, click here.

Zacks Investment Research

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Berkshire Hathaway Q4 2021 earnings and book value estimates could crush S&P in 2022 https://medielys.com/2022/01/06/berkshire-hathaway-q4-2021-earnings-and-book-value-estimates-could-crush-sp-in-2022/ Thu, 06 Jan 2022 08:00:00 +0000 https://medielys.com/2022/01/06/berkshire-hathaway-q4-2021-earnings-and-book-value-estimates-could-crush-sp-in-2022/ Mark Wilson/Getty Images News Berkshire Hathaway (BRK.A) (BRK.B) continues to swim in the money. Berkshire left the third quarter with $149 billion, down from $144 billion on June 30 despite repurchasing $7.6 billion of stock in the quarter. Data by YCharts Slowly but surely, these share buybacks are having a real impact. Data by YCharts […]]]>

Mark Wilson/Getty Images News

Berkshire Hathaway (BRK.A) (BRK.B) continues to swim in the money. Berkshire left the third quarter with $149 billion, down from $144 billion on June 30 despite repurchasing $7.6 billion of stock in the quarter.

Berkshire Hathaway stock price
Data by YCharts

Slowly but surely, these share buybacks are having a real impact.

Berkshire Hathaway Shares Outstanding
Data by YCharts

In the fourth quarter, I expect another strong quarter from Berkshire’s operations as the equity portfolio continues to grow.

Fourth Quarter Holdings Update

The value of Berkshire’s investments in non-Kraft Heinz (KHC) equity securities has risen 12.3% to $334.5 billion from $297.7 billion last quarter, most of which came from Apple (AAPL). Again.

Berkshire Hathaway valuation in Q4 2021

From the gain of $36.8 billion, after increasing the future tax liability on the balance sheet as “income taxes, primarily deferred” and subtracting 21%, we see a net book value gain of 29 billion for the fourth quarter.

Fourth quarter operating profit

Berkshire Hathaway Q4 2021 Operating Results

Fourth quarter operating results should again be strong, if almost boring in consistency.

Insurance underwriting should produce a small gain. The Atlantic hurricane season ended quietly, but lingering claims from Hurricanes Ida and Harvey could impact the fourth quarter, along with rising auto claims as more drivers get back on the road.

I will estimate a $300 million gain for this quarter.

Assurance investment income should happen $1.2 billion. The $1 billion slide in interest rate cuts on short-term debt is fully annualized at this point and could improve if the Fed raises rates. Investment income should be higher in the coming quarters.

Rail, Utilities and Energy should show gains over last year. Rail volumes at BNSF is flat or slightly down from last quarter but up 7% from last year. For BHE, the fourth quarter is a weaker seasonal period, but there is much more economic activity this fourth quarter than the last.

I estimate $2.5 billion in the income of this group.

Other companies containing dozens of companies like Precision Castparts, Lubrizol, Marmon and other industrial companies, should post year-over-year gains, although I expect supply chain disruptions and rising raw material prices are again affecting profitability this quarter. I expect many of these costs to be passed on to end customers next year.

I will estimate $2.7 billion income again from this group.

Other should produce a $500 million Gain as equity gains from Kraft Heinz and Pilot, along with the continued strength of the U.S. dollar, offset the usual expenses (mainly amortization of past acquisitions.)

In total, I expect fourth quarter operating profit to be around $7.2 billion and an annual operating profit of $27.3 billion.

Current book value

As reported in 2021 Berkshire Q3 10-Q the book value as of September 30, 2021 was $472 billion.

Adding the $29 billion net gain from equity investments to $7.2 billion in operating profit, I project the Q4-21 book value to $508 billion.

Berkshire Hathaway price at book value

Berkshire’s market capitalization as of December 31 was $668 billion. Dividing that by $508 billion yields a price/book value of 1.31x for Q4.

Outlook and recommendations for 2022

Berkshire Hathaway even traded with the S&P 500 (including dividends) in 2021, but is off to a fast start in 2022.

Although I have opined on Berkshire’s valuation in this series, I have never made a prediction on Berkshire’s stock price relative to the broader S&P 500 Index. Until now. I believe Berkshire crushes the S&P 500 in 2022 and outperforms the index by 15% or more.

The return of Berkshire Hathaway
Data by YCharts

Why? Evaluation. Now that the Fed is tightening, I think this is the first year in a long time that valuation is back in focus. I expect, and am personally positioned for, a rotation from high tech multiples to lower tech multiples, and I think Berkshire is uniquely positioned to benefit from this.

While I’m not predicting a recession or anything drastic, I can absolutely see a scenario in which the S&P 500 ends the year flat, with value stocks appreciating 20% ​​and multiple tech stocks high decreasing by a similar amount.

Berkshire Hathaway price at book value
Data by YCharts

Remember that Berkshire traded around 1.5 times the pound for much of 2017-19. I think we could get back to that range in 2022.

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5 low book value stocks to buy as 2022 approaches https://medielys.com/2021/12/22/5-low-book-value-stocks-to-buy-as-2022-approaches/ Wed, 22 Dec 2021 15:02:49 +0000 https://medielys.com/2021/12/22/5-low-book-value-stocks-to-buy-as-2022-approaches/

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In value analysis, although price-to-earnings (P / E) and price-to-sell (P / S) are the most popular with investors, price-to-book ratio (P / B ratio) under – rated is also an easy to use tool. valuation tool to identify low-priced stocks with exceptional returns. The ratio is used to compare the value / market price of a stock to its book value.

The P / B ratio is calculated as below:

P / B ratio = market price per share / book value of equity per share

The P / B ratio reflects the number of times book value investors are willing to pay for a stock. So if the stock price is $ 10 and the book value of equity is $ 5, investors are willing to pay twice the book value. Now let’s understand the concept of book value.

The P / B ratio helps identify low-priced stocks that have high growth prospects. ASE Technology Holding ASX, Bookmark Jewelers Limited GIS, Celestica CLS, DXC Technology Company DXC and Atlas Corp. ATCO are just a few of those choices.

What is book value?

There are several ways to define the book value. Book value is the total value that would remain, according to the company’s balance sheet, in the event of immediate bankruptcy. In other words, this is what shareholders would theoretically receive if a company liquidated all of its assets after paying off all of its liabilities.

It is calculated by subtracting total liabilities from total assets of a business. In most cases, this is equivalent to common shareholders’ equity on the balance sheet. However, depending on the company’s balance sheet, intangible assets must also be subtracted from total assets to determine book value.

Understanding the P / B Ratio

By comparing the book value of equity to its market price, we get an idea of ​​whether a company is undervalued or overvalued. However, like the P / E or P / S ratio, it is always best to compare P / N ratios within industries.

An AP / E ratio of less than one means the stock is trading below its book value or the stock is undervalued and therefore is a good buy. Conversely, a stock with a ratio greater than one can be interpreted as being overvalued or relatively expensive.

For example, a stock with a P / N ratio of 2 means we pay $ 2 for every $ 1 of book value. Thus, the higher the P / B, the more expensive the action.

But there is a caveat. An AP / E ratio of less than one can also mean that the company is generating low or even negative returns on its assets or that the assets are overvalued, in which case the stock should be avoided as it can destroy shareholder value. Conversely, the share price can be significantly high – thus pushing the P / B ratio to more than one – in the probable event that it has become a takeover target, reason enough to hold the share. ‘action.

In addition, the P / B ratio is not without limits. It is useful for businesses – like finance, investment, insurance, and banking or manufacturing companies – with many liquid / tangible assets on the books. However, this can be misleading for companies with large R&D spending, high debt, service companies, or those with negative profits.

In any case, the ratio is not particularly relevant as a stand-alone number. One should analyze other ratios such as P / E, P / S and debt / equity before making a reasonable investment decision.

Screening parameters

Price to Book (Common Equity) below the X-Industry median: A lower P / B than the industry average implies that there is enough room for the stock to win.

Sales price below the X-Industry median: The P / S ratio determines the market value for every dollar of the company’s sales / revenue – a lower ratio than the industry makes the stock attractive.

Price / profit using an F (1) estimate lower than the X-Industry median: The P / E (F1) ratio values ​​a company based on its current share price relative to its estimated earnings per share – a lower ratio than the industry is considered better.

PEG less than 1: The PEG relates the P / E ratio to the company’s future growth rate. The PEG ratio gives a more complete picture than the P / E ratio. A value less than 1 indicates that the stock is undervalued and that investors should pay less for a stock that has good prospects for earnings growth.

Current price greater than or equal to $ 5: They must all trade at a minimum of $ 5 or more.

Average volume over 20 days greater than or equal to 100,000: A substantial trading volume ensures that the stock is easily tradable.

Rank of Zacks less than or equal to # 2: Zacks Rank # 1 (Strong Buy) or 2 (Buy) stocks are known to outperform regardless of the market environment.

Value Score Equal to A or B: Our research shows that stocks with a value score of A or B, when combined with a Zacks # 1 or 2 ranking, offer the best opportunities in the investment space. valuable.

Here are our five choices among the 13 actions that qualified the screening:

ASE Technology Holding is a semiconductor assembly and test manufacturing service provider.

ASE Technology Holding has a projected 3 to 5 year EPS growth rate of 26.9%. ASE Technology Holding currently has a Zacks Rank # 2 and a Value Score of A. You can view the full list of Zacks # 1 Rank stocks today here.

Jewelers Signet rings Limited is a retailer of diamond jewelry, watches and other products. Signet Jewelers has a projected 3 to 5 year EPS growth rate of 8.0%.

Signet Jewelers currently has a Zacks # 1 rank and a value score of A.

Celestica is one of the largest electronics manufacturing services companies in the world, serving the computer and communications industries.

Celestica has a Zacks Rank # 2 and a Value Score of A. Celestica has a projected 3 to 5 year EPS growth rate of 10.2%.

DXC Technology Company provides information technology services and solutions primarily in North America, Europe, Asia and Australia. DXC Technology Company has a Zacks Rank # 2 and a Value Score of A.

DXC Technology Company was formed by the amalgamation of Computer Sciences Corporation (“CSC”) and the Enterprise Services Division of Hewlett Packard Enterprise (“HPE”), which was completed on April 1, 2017. DXC Technology Company a a forecast of 3-5- annual EPS growth rate of 27.4%.

Atlas Corp. is an asset management company, which operates as an independent owner and manager of container ships.

Atlas Corp. has a projected 3 to 5 year EPS growth rate of 27.9%. Atlas Corp currently has a Zacks Rank # 1 and a Value Score of A.

Get the rest of the actions on the list and start testing this idea and others. All of this can be done with Research Wizard stock picking and backtesting software.

The Research Assistant is a great place to start. It’s easy to use. Everything is in plain language. And it’s very intuitive. Start your research assistant trial today. And the next time you read an economic report, open the research assistant, plug in your findings, and see what gems come out of it.

Click here to sign up for a free trial of the Research Assistant today.

Disclosure: Officers, directors and / or employees of Zacks Investment Research may own or have sold securities short and / or hold long and / or short positions in options mentioned in this document. An affiliated investment advisory firm may own or have sold securities short and / or hold long and / or short positions in options mentioned in this document.

Disclosure: Information on the performance of Zacks’ portfolios and strategies can be found at: https://www.zacks.com/performance

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Atlas Corp. (ATCO): Free Stock Analysis Report

To read this article on Zacks.com, click here.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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5 Low Price-to-Book Stocks to Buy in December – December 7, 2021 https://medielys.com/2021/12/07/5-low-price-to-book-stocks-to-buy-in-december-december-7-2021/ Tue, 07 Dec 2021 08:00:00 +0000 https://medielys.com/2021/12/07/5-low-price-to-book-stocks-to-buy-in-december-december-7-2021/ The price-to-book (P/B) ratio is widely favored by value-oriented investors to identify low-priced stocks offering exceptional returns. The ratio is used to compare the market value/price of a stock to its book value. The P/B ratio is calculated as follows: P/B ratio = market price per share / book value of equity per share The […]]]>

The price-to-book (P/B) ratio is widely favored by value-oriented investors to identify low-priced stocks offering exceptional returns. The ratio is used to compare the market value/price of a stock to its book value.

The P/B ratio is calculated as follows:

P/B ratio = market price per share / book value of equity per share

The P/B ratio reflects the number of times investors’ book value is willing to pay for a stock. So if the stock price is $10 and the equity book value is $5, investors are willing to pay double the book value. Ideally, a P/B value below 1.0 is considered good, indicating a potentially undervalued stock. However, value investors often consider stocks with a P/B value below 3.0.

The P/B ratio helps identify low-priced stocks that have high growth prospects. ESA Technology (ASX free report), Knowledge base home (KBH free report), celestial (CLS free report), DXC Technology Company (DXC free report) and Atlas Corp. (ATCO Free Report) are some of those choices.

What is the book value?

There are several ways to define book value. Book value is the total value that would remain, according to the company’s balance sheet, if it went bankrupt immediately. In other words, it’s what shareholders would theoretically receive if a company liquidated all of its assets after settling all of its liabilities.

It is calculated by subtracting the total liabilities from the total assets of a business. In most cases, this equates to common shareholders’ equity on the balance sheet. However, according to the company’s balance sheet, intangible assets must also be subtracted from total assets to determine book value.

Understanding the P/B ratio

By comparing the book value of equity to its market price, we get an idea if a company is undervalued or overvalued. However, like the P/E or P/S ratio, it is always best to compare P/B ratios within industries.

An AP/B ratio of less than one means the stock is trading at a price below its book value, or the stock is undervalued and therefore a good buy. Conversely, a stock with a ratio greater than one can be interpreted as being overvalued or relatively expensive.

For example, a stock with a P/B ratio of 2 means we pay $2 for every $1 of book value. Thus, the higher the P/B, the more expensive the stock.

But there is a caveat. An AP/B ratio of less than one can also mean that the company is getting low or even negative returns on its assets or that the assets are overvalued, in which case the stock should be avoided as it can destroy shareholder value. Conversely, the price of the stock may be significantly high – thereby pushing the P/B ratio to more than one – in the likely event that it has become a buyout target, reason enough to hold the stock. .

Moreover, the P/B ratio is not without limits. It is useful for businesses – such as finance, investments, insurance, and banking or manufacturing companies – with many liquid/tangible assets on the books. However, this can be misleading for companies with large R&D expenses, high debt, service companies, or those with negative earnings.

In any case, the ratio is not particularly relevant as a stand-alone number. Other ratios such as P/E, P/S and debt/equity should be analyzed before making a reasonable investment decision.

Screening Parameters

Price to Book (common Equity) below the X-Industry median: A lower P/B relative to the industry average implies that there is enough room for the stock to win.

Selling price below median X-Industry: The P/S ratio determines how much the market values ​​each dollar of the company’s sales/revenue – a lower ratio than the industry makes the stock attractive.

Price/earnings ratio using F(1) estimate below industry median X: The P/E (F1) ratio values ​​a company based on its current share price relative to its estimated earnings per share – a lower ratio than the industry is considered better.

PEG less than 1: The PEG relates the P/E ratio to the future growth rate of the company. The PEG ratio gives a more complete picture than the P/E ratio. A value below 1 indicates the stock is undervalued and investors should pay less for a stock that offers good earnings growth prospects.

Current price greater than or equal to $5: They must all trade at a minimum of $5 or more.

Average volume over 20 days greater than or equal to 100,000: Substantial trading volume ensures that the stock is easily tradable.

Zacks rating less than or equal to #2: Zacks Rank #1 (Strong Buy) or 2 (Buy) stocks are known to outperform regardless of the market environment.

Value Score of A or B: Our research shows that stocks with a Value Score of A or B, when combined with a Zacks #1 or 2 ranking, offer the best opportunities in the investment space valuable.

Here are our five picks from the 15 stocks that qualified the selection:

ASE Technology Holding is a provider of semiconductor manufacturing services in the areas of assembly and testing.

ASE Technology Holding forecasts an EPS growth rate of 26.9% over 3 to 5 years. ASE Technology Holding currently has a Zacks Rank #2 and a Value Score of A. You can see the full list of today’s Zacks Rank #1 stocks here.

Knowledge base home is a well-known home builder in the United States and one of the largest in the United States. KB Home forecasts an EPS growth rate of 36.7% over 3 to 5 years.

KB Home currently has a Zacks Rank #2 and a Value Score of A.

celestial is one of the world’s largest electronics manufacturing services companies, serving the computer and communications industries.

Celestica has a Zacks rank of No. 2 and a value score of A. Celestica has an expected 3-5 year EPS growth rate of 10.2%.

DXC Technology Company provides information technology services and solutions primarily in North America, Europe, Asia and Australia. DXC Technology Company has a Zacks Rank #2 and a Value Score of A.

DXC Technology Company was formed by the merger of Computer Sciences Corporation (“CSC”) and the business services division of Hewlett Packard Enterprise (“HPE”), which was completed on April 1, 2017. DXC Technology Company has a forecast of 3-5-year EPS growth rate of 27.4%.

Atlas Corp. is an asset management company, which operates as an independent charterer and manager of container ships.

Atlas Corp. forecast an EPS growth rate of 27.9% over 3 to 5 years. Atlas Corp currently has a Zacks Rank #1 and a Value Score of A.

Get the rest of the stocks on the list and start testing this idea and others. All of this can be done with Research Wizard stock picking and back testing software.

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Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in the options mentioned herein. An affiliated investment adviser may hold or have shorted securities and/or hold long and/or short positions in options mentioned herein.

Disclosure: Information on the performance of Zacks portfolios and strategies is available at: https://www.zacks.com/performance

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5 Low Price-to-Book Stocks to Buy in December https://medielys.com/2021/12/07/5-low-price-to-book-stocks-to-buy-in-december/ Tue, 07 Dec 2021 08:00:00 +0000 https://medielys.com/2021/12/07/5-low-price-to-book-stocks-to-buy-in-december/ The price-to-book (P/B) ratio is widely favored by value-oriented investors to identify low-priced stocks offering exceptional returns. The ratio is used to compare the market value/price of a stock to its book value. The P/B ratio is calculated as follows: P/B ratio = market price per share / book value of equity per share The […]]]>

The price-to-book (P/B) ratio is widely favored by value-oriented investors to identify low-priced stocks offering exceptional returns. The ratio is used to compare the market value/price of a stock to its book value.

The P/B ratio is calculated as follows:

P/B ratio = market price per share / book value of equity per share

The P/B ratio reflects the number of times investors’ book value is willing to pay for a stock. So if the stock price is $10 and the equity book value is $5, investors are willing to pay double the book value. Ideally, a P/B value below 1.0 is considered good, indicating a potentially undervalued stock. However, value investors often consider stocks with a P/B value below 3.0.

The P/B ratio helps identify low-priced stocks that have high growth prospects. ESA Technology ASX, Knowledge base home KBH, celestial CLS, DXC Technology Company DXC and Atlas Corp. ATCO are some of those choices.

What is the book value?

There are several ways to define book value. Book value is the total value that would remain, according to the company’s balance sheet, if it went bankrupt immediately. In other words, it’s what shareholders would theoretically receive if a company liquidated all of its assets after settling all of its liabilities.

It is calculated by subtracting the total liabilities from the total assets of a business. In most cases, this equates to common shareholders’ equity on the balance sheet. However, according to the company’s balance sheet, intangible assets must also be subtracted from total assets to determine book value.

Understanding the P/B ratio

By comparing the book value of equity to its market price, we get an idea if a company is undervalued or overvalued. However, like the P/E or P/S ratio, it is always best to compare P/B ratios within industries.

An AP/B ratio of less than one means the stock is trading at a price below its book value, or the stock is undervalued and therefore a good buy. Conversely, a stock with a ratio greater than one can be interpreted as being overvalued or relatively expensive.

For example, a stock with a P/B ratio of 2 means we pay $2 for every $1 of book value. Thus, the higher the P/B, the more expensive the stock.

But there is a caveat. An AP/B ratio of less than one can also mean that the company is getting low or even negative returns on its assets or that the assets are overvalued, in which case the stock should be avoided as it can destroy shareholder value. Conversely, the price of the stock may be significantly high – thereby pushing the P/B ratio to more than one – in the likely event that it has become a buyout target, reason enough to hold the stock. .

Moreover, the P/B ratio is not without limits. It is useful for businesses – like finance, investments, insurance and banking or manufacturing companies – with many liquid/tangible assets on the books. However, this can be misleading for companies with large R&D expenses, high debt, service companies, or those with negative earnings.

In any case, the ratio is not particularly relevant as a stand-alone number. Other ratios such as P/E, P/S and debt/equity should be analyzed before making a reasonable investment decision.

Screening Parameters

Price to Book (common Equity) below the X-Industry median: A lower P/B relative to the industry average implies that there is enough room for the stock to win.

Selling price below median X-Industry: The P/S ratio determines how much the market values ​​each dollar of the company’s sales/revenue – a lower ratio than the industry makes the stock attractive.

Price/earnings ratio using F(1) estimate below industry median X: The P/E (F1) ratio values ​​a company based on its current share price relative to its estimated earnings per share – a lower ratio than the industry is considered better.

PEG less than 1: The PEG relates the P/E ratio to the future growth rate of the company. The PEG ratio gives a more complete picture than the P/E ratio. A value below 1 indicates the stock is undervalued and investors should pay less for a stock that offers good earnings growth prospects.

Current price greater than or equal to $5: They must all trade at a minimum of $5 or more.

Average volume over 20 days greater than or equal to 100,000: Substantial trading volume ensures that the stock is easily tradable.

Zacks rating less than or equal to #2: Zacks Rank #1 (Strong Buy) or 2 (Buy) stocks are known to outperform regardless of the market environment.

Value Score of A or B: Our research shows that stocks with a Value Score of A or B, when combined with a Zacks #1 or 2 ranking, offer the best opportunities in the investment space valuable.

Here are our five picks from the 15 stocks that qualified the selection:

ASE Technology Holding is a provider of semiconductor manufacturing services in the areas of assembly and testing.

ASE Technology Holding forecasts an EPS growth rate of 26.9% over 3 to 5 years. ASE Technology Holding currently has a Zacks Rank #2 and a Value Score of A. You can see the full list of today’s Zacks Rank #1 stocks here.

Knowledge base home is a well-known home builder in the United States and one of the largest in the United States. KB Home forecasts an EPS growth rate of 36.7% over 3 to 5 years.

KB Home currently has a Zacks Rank #2 and a Value Score of A.

celestial is one of the world’s largest electronics manufacturing services companies, serving the computer and communications industries.

Celestica has a Zacks rank of No. 2 and a value score of A. Celestica has an expected 3-5 year EPS growth rate of 10.2%.

DXC Technology Company provides information technology services and solutions primarily in North America, Europe, Asia and Australia. DXC Technology Company has a Zacks Rank #2 and a Value Score of A.

DXC Technology Company was formed by the merger of Computer Sciences Corporation (“CSC”) and the business services division of Hewlett Packard Enterprise (“HPE”), which was completed on April 1, 2017. DXC Technology Company has a forecast of 3-5-year EPS growth rate of 27.4%.

Atlas Corp. is an asset management company, which operates as an independent charterer and manager of container ships.

Atlas Corp. forecast an EPS growth rate of 27.9% over 3 to 5 years. Atlas Corp currently has a Zacks Rank #1 and a Value Score of A.

Get the rest of the stocks on the list and start testing this idea and others. All of this can be done with Research Wizard stock picking and back testing software.

The research assistant is a great starting point. It’s easy to use. Everything is in plain language. And it’s very intuitive. Start your search assistant trial today. And the next time you’re reading an economic report, open up the research assistant, plug in your findings, and see what gems come out.

Click here to sign up for a free trial of Research Assistant today.

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in the options mentioned herein. An affiliated investment advisory firm may hold or have shorted securities and/or hold long and/or short positions in options mentioned herein.

Disclosure: Information on the performance of Zacks portfolios and strategies is available at: https://www.zacks.com/performance

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KB Home (KBH): Free Stock Analysis Report

Celestica, Inc. (CLS): Free Stock Analysis Report

ASE Technology Holding Co., Ltd. (ASX): Free Stock Analysis Report

DXC technology company. (DXC): Free Stock Analysis Report

Atlas Corp. (ATCO): Free Inventory Analysis Report

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