Markets
GPI

Zacks Value Investor Highlights: Bank of America, Copa Holdings, Goldman Sachs, Group 1 Automotive and Western DigitalZacks Value Investor Highlights: Bank of America, Copa Holdings, Goldman Sachs, Group 1 Automotive and Western Digital

An image of a stock chart displayed on a tablet
Credit: Shutterstock photo

Chicago, IL - January 27, 2017 - Zacks Value Investor is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here:( https://www.zacks.com/stock/news/246854/how-to-find-value-stocks-using-the-pricetobook-ratio ).

How to Find Value Stocks Using the Price-to-Book Ratio

Welcome to Episode #27 of the Value Investor Podcast

Every week, Zacks value stock strategist and the Editor of Zacks Value Investor portfolio service, Tracey Ryniec, talks about all things happening in the value stock universe, including her top stock picks.

In 2017, she has covered several different ways to find value stocks including using the PEG ratio and the Price-to-Sales ratio. This week, Tracey looks into the price-to-book ratio.

The P/B ratio is often one investors overlook. Tracey discusses what the P/B ratio is and why a value investor would want to use it.

The lower the ratio the more undervalued a company can be. But investors should be cautious in reading too much into the ratio. It works well with companies that have assets on their books but not as well with companies that have a lot of intellectual property like patents or service companies.

Additionally, Tracey discusses why you shouldn't only use the P/B ratio as your screening tool. It doesn't give you a complete picture of the value stocks out there.

That's why she screened with P/B and included the Zacks Rank of #1 (Strong Buy) and #2 (Buy). That means the earnings estimates are rising. Even with the inclusion of the Zacks Rank, she still ended up with over 500 stocks.

In order to bring more value into the screen, she added a P/E under 15 and it gave her a more manageable list.

Looking for a P/B ratio under 3.0 meant that many in her screen were banks. Banks are cheap right now and bank investors like to use P/B, not P/E, as a screen in that industry.

If you're looking for bank stocks that are undervalued, the P/B is one screening method you should definitely keep in your arsenal.

What stocks with P/B ratios under 3.0 caught Tracey's eye?

5 Stocks with Attractive P/B Ratios

  1. Bank of America (NYSE: BAC - Free Report ) has a price-to-book ratio of 0.9. Many of the banks are values, despite their recent run-up.

  2. Copa Holdings (NYSE: CPA - Free Report ), the Panamanian airlines, has a price-to-book ratio of 2.3. Tracey likes the airlines and Copa is one of her favorites in the international space.

  3. Goldman Sachs (NYSE: GS - Free Report ) has a price-to-book ratio of 1.2. Despite its recent stock run, it has a P/E of just 12. It's cheap.

  4. Group 1 Automotive (NYSE: GPI - Free Report ) has a price-to-book of 1.9. Investors should take a look at the auto retailers.

  5. Western Digital (NASDAQ: WDC - Free Report ) has a price-to-book of 1.9 and a forward P/E of just 12.7. It's hard to find a "cheap" tech stock. And it just beat big on earnings.

What else does Tracey think about using the price-to-book ratio to find value stocks?

Find out on this week's podcast.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros .

Get the full Report on BAC - FREE

Get the full Report on CPA - FREE

Get the full Report on GS - FREE

Get the full Report on GPI - FREE

Get the full Report on WDC - FREE

Follow us on Twitter: https://twitter.com/zacksresearch

Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

https://www.zacks.com/performance

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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

Bank of America Corporation (BAC): Free Stock Analysis Report

Copa Holdings, S.A. (CPA): Free Stock Analysis Report

Goldman Sachs Group, Inc. (The) (GS): Free Stock Analysis Report

Group 1 Automotive, Inc. (GPI): Free Stock Analysis Report

Western Digital Corporation (WDC): Free Stock Analysis Report

To read this article on Zacks.com click here.

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


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

In This Story

GPI BAC GS CPA WDC

Other Topics

Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More