Book value is not always a great metric to measure against. The book value of a company doesn’t necessarily mean there’s some floor against which one should measure a company’s minimal value. After all, if a company is headed for bankruptcy, it may be trading below book value but not below liquidation value.
However, searching for stocks that trade at a relatively low book value can be a good reason to examine a company for possible stock purchase. It may be an indicator of value that presses you to examine other metrics.
Book value is defined as assets minus intangible assets minus liabilities. In this case, we’re looking for stocks with a price-to-book ratio of 1 or less.
These three companies came up on that book value screen, and on further examination, it seems like they may be worth considering as additions to various types of portfolios.