Stocks trading below tangible book value

Stocks trading below tangible book value

Posted: maxit Date: 30.06.2017

In a rising stock market, all eyes are on the income statement.

But in a flat or falling market, the balance sheet moves into the spotlight. Investors want to know that their stocks that possess certifiable take-it-to-the-bank value. The recent drubbing among tech and biotech stocks brought this issue right to the fore. Many of these stocks traded for 10 or even 20 times tangible book value and had no floor in place when investors began to head for the exits.

As Warren Buffett 's gurus, Benjamin Graham and David Dodd, explained eight decades ago, you can sleep well at night only if you own stocks that are valued at a lower price than the net assets on the balance sheet -- what's known as "below book. Back in Graham and Dodd's era, you could find many stocks sporting such value.

stocks trading below tangible book value

And the pool of stocks that trade at a very deep discount to book value is even smaller. A quick review of such stocks suggests that a few industries are especially cheap in relation to their hard assets.

Consider the gold and silver miners as an example. Why are they so cheap? Because the current slump in gold and silver prices has led investors to question the value of their hard assets. Mines acquired a few years ago at the peak of the precious metals bubble are likely worth less today. And industry profits are subpar at the moment. Gold and silver miner Coeur Mining NYSE: CDE typifies this industry's woes.

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And investors have responded by pushing this stock far below the net value stocks trading below tangible book value its assets. If mining stocks hold little appeal to you right now, you can find below-book stocks in other sectors. Another fertile area for such deep value plays is in the insurance industry. Not only do these companies possess solid balance sheets, but their cash daily penny stocks to buy will yield ever greater returns as interest rates rise.

My colleague Adam Fischbaum recently noted indicadores para forex tester 1 intriguing group of insurers on his buy list. Not interested in miners or insurers? Well, there are other below-book value stocks hidden in various forex company singapore of the market.

10 Great Stocks Trading Below Book Value | StreetAuthority

For example, check out TravelCenters of America NYSE: Royal Caribbean Cruises NYSE: I came across a few dozen other below-book stocks. Here are 10 that hold great appeal:. A few notes about these stocks: SFY has seen a considerable amount of insider buying over the past few quarters.

C is buy sks bullpup stock only major bank stock trading at such a deep discount to book value, and many investors are ignoring the fact that book value is growing at a rapid pace.

AYR not only owns an undervalued collection of for-lease airplanes, but also sports a 4. CCGwhich I profiled a year ago. These below-book stocks lack catalysts, and it may take a few years to claw their way back to book value.

In a falling market, investors can squarely focus on their hard assets. Every one of these companies should be using their balance sheet to their advantage.

Share buybacks, for example, are a no-brainer move. I was sitting at a long stoplight yesterday, minding my own business, patiently waiting for it to turn green even though there was no on-coming traffic.

Book Value: How Reliable Is It For Investors?

A carload of bearded, young, loud Muslims shouting Anti-American slogans with a half-burned American Flag duct-taped on the trunk of their car and a "Remember " slogan spray painted on the side was stopped next to me.

Suddenly they yelled, "Allah Akbar! Death to America" and took off before the light changed.

stocks trading below tangible book value

Out of nowhere an wheeler came speeding through the intersection and ran directly over their car, crushing it completely and killing everyone in it. For several minutes I sat in my car thinking to myself: Markets close in 1 hr 56 mins.

Today's Charts Nike gains on Amazon talk; Citi downgrades Target; Oracle earnings on tap. StreetAuthority Network May 22, Recently Viewed Your list is empty. What to Read Next.

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