ratio of a stock's price to its book value per share. This number is used by securities analysts and money managers to judge whether a stock is undervalued or overvalued. A stock selling at a high price/book ratio, such as 3 or higher, may represent a popular growth stock with minimal book value. A stock selling below its book value may attract value-oriented investors.
ratio of a stock's price to its book value per share. This number is used by securities analysts and money managers to judge whether a stock is undervalued or overvalued. A stock selling at a high price/book ratio, such as 3 or higher, may represent a popular growth stock with minimal book value. A stock selling below its book value may attract value-oriented investors who think that the company's management may undertake steps, such as selling assets or restructuring the company, to unlock the hidden value on the company's balance sheet.
