Most value investors analyze companies based on their current financial performances, as measured by the stock price as a multiple of earnings or book value.
Privately held fortunes were valued at book value or by coupling estimates of revenues, profits or book value to prevailing ratios for similarly publicly traded companies.
Barrow, 60, is sticking to the formula he has used for nearly four decades: Pay some attention to the prospects for a company, just as a growth manager would, but don't buy unless it is trading at a low multiple of its earnings or book value.
With such a foggy outlook, it is only natural that markets value many investment banks at or below book value.
And with many stocks trading at or below book value, analysts say there are bargains to be found.
Better to select investments that have shown a consistent record of paying out cash or building book value and retained earnings.
The goodwill impairment charge, or lowered book value of an asset, arose after the Advanced Micro Devices conducted an analysis of the businesses and determined that they weren't performing to its expectations, making it the second ATI-related write-down that the chipmaker has had to stomach since buying the company in July 2006.
The goodwill impairment charge, or lowered book value of an asset, arose after the Advanced Micro Devices (nyse: AMD - news - people ) conducted an analysis of the businesses and determined that they weren't performing to its expectations, making it the second ATI-related write-down that the chipmaker has had to stomach since buying the company in July 2006.
You could make a reasonable argument for why these companies are better investments using fundamental metrics, like price to earnings or price to book value.
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Whenever a company trading at a premium to book value issues new shares, whether from a secondary offering or in the course of an acquisition, the book value per share goes up.
These choices are often made on the basis of projected earnings, book value, or some other fundamental justification.
Ardour Capital's Nasdeo says other traditional metrics, such as price-to-sales or price-to-book value, are not really much help either.
As such, their book value, or the difference between assets and liabilities, more accurately reflects market conditions that of other companies.
And what matters more, price-to-earnings or price-to-book value?
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Everyone running money then owned tons of IBM as a growth stock, but nobody I knew dared to predict that IBM would one day sell at book value, or that the market would sell at eight times earnings in 1974.
In these cases, the utility book value of nuclear or technologically obsolete plants and equipment exceeds market value.
Change them in yet another way and book value, the asset value, of many stocks could double or even treble.
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The shares have climbed more than 35% since, yet still trade at a discount of 23% to book value, the difference, or net worth, between its assets and its liabilities.
With this in mind, Schutz figures a bank whose shares can be had for about one times book value today may well fetch 1.5 times book in a year or two.
The offering, priced at two times book value, is a better deal than most European or American banks could get for issuing new shares at home.
However, tangible book value per share is a good measure of liquidation value, or the amount that shareholders can reasonably expect to receive should the company go under.
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While premiums to book value have eroded in recent quarters as share prices stagnated and dividends were flat or cut, keep in mind that the relative attractiveness of the Agency MREIT yields has actually increased as competing investment yields have fallen.
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But the oil-service firms will get only the book value of their assets, paid in government bonds and with deductions for any labour or environmental liabilities the government adduces.
In doing so, it adds or improves properties the enhance the value of the firm as described by Ms. Merchant in her book: innovation, experimentation, work ethic, customer satisfaction, etc.
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