Questions tagged [book-value]
20 questions
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Why are Bank of America and Citi trading so far below book value?
In 2008, a famously wealthy man bet big on Bear Sterns, citing that it was absurd that it was trading below book value. That man is now only slightly wealthy. The lesson was that you should trust book value as a floor on valuation only if you're…
Buttle Butkus
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Correct calculation for determining real business book value per share?
I'm trying to calculate the real value of a business and, as an example, I picked Netflix.
From their latest financial statements I can see that:
Assets value is: $3,065,709,000
Liabilities value is: $2,417,386,000
So, their book value is…
Vikram
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What could cause a stock to trade below book value?
A company's book value is the worth of all their assets. What would cause a stock to trade below book value?
Bruce Alderman
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6
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3 answers
How to calculate stock price (value) based on given values for equity and debt?
If a company has $80 million in equity and $20 million in debt, this means that total firm value = D + E = $100 million.
Am I then right to assume that if there are 1 million shares outstanding, then each share is worth $100? Or, do I have to…
ARTFAN
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How come we can find stocks with a Price-to-Book ratio less than 1?
I was wondering, if there is such a stock, why isn't everyone getting it as there is supposedly no risk.
For instance, a stock like NYSEARCA:VDE has
Price to Book: 0.78.
Div yield: 1.99.
Growing net income for the last 5 years.
P/E: 4.05.
I would…
Benoît
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2 answers
If a stock is selling for less than book value, is the company headed for bankruptcy?
A company's book value is the worth of all their assets. If its stock value is less than its book value, does that mean its business is worthless and bankruptcy is imminent?
This is a followup to my previous question, What could cause a stock to…
Bruce Alderman
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3
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Value of mother-in-law cottage for purposes of will
Let's say there's the following scenario. A couple who are homeowners and parents of three adult children build a small, one-story detached mother-in-law cottage (500 sq. ft.) with kitchen and bathroom on their existing property. They then sell the…
Seattle Part 2
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What prices are compared to decide a security is over-valued, fairly valued or under-valued?
The Capital Asset Pricing Model (CAPM) for asset i is
E(R_i) = R_f + \beta_{i} (E(R_m) - R_f)
It can be used for asset pricing
We can compare the expected/required rate of return, E(R_i), calculated using CAPM, to the asset's
estimated rate of…
Tim
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What determines the value/price of an ETF
An ETF is a collection of shares packaged into a single tradeable equity.
But since the marketvalue of an ETF unit is determined by market forces, what impact does the change in value of an individual shares apart of ETF have.
e.g A Tech ETF holds…
Darren rogers
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If total assets less total liabilities is positive, how should negative shareholders' equity be interpreted?
For some recently public companies, total assets minus total liabilities is a positive number, but shareholders' equity is negative. In some cases, this appears to be the result of a past sale of preferred shares. Credo (NASDAQ: CRDO) offers one…
SapereAude
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P/E & P/B of stocks purchased by Warren Buffett
I am looking for data about Warren Buffett's famous purchases.
For e.g. when Warren Buffett purchased stock of Coke, American Express, Moody's & other of his long term purchases what was the P/E & P/B of these stocks when he purchased them.
user93353
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Is the price-to-book ratio too arbitrary to be useful to investors?
Many financial portal websites show the price-to-book (P/B) ratio of companies. For example, Yahoo Finance shows this P/B ratio for TotalEnergies SE:
Under IFRS (IAS 16 — Property, Plant and Equipment), a company can choose to state the value of…
Flux
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Trading for less the value of cash and cash equivalent
What means when investors says the stock trade for less of cash and cash equivalents. Some times they say trades less than book value or assets. Can you make me an example with real stock? How this is calculated? Just take the cash and divide it by…
DevLeo
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Is a company's book value included in its intrinsic value?
According to value investing, the general way to find the instrinsic value of a company, and therefore its stock, is to estimate its future cash earnings in perpetuity.
However, this doesn't take into account the company's book value, the net value…
Paul Pham
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If book value > market value, will stock price increase if a liquidation is announced?
If a company has a book value that's greater than it's market value, will its stock price jump if it's announced that the company will be liquidated?
Jonah
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