What’s Price-to-Book Value and the Ideal P/BV?
The price-to-book value is a financial metric that compares a company’s market price per share to its book value per share. It is calculated by dividing the market price per share by the book value per share.
What’s the ideal price-to-book value (P/BV)?
There’s no universal or ideal price-to-book value, but a P/BV less than 1 typically suggests that the market values the company lower than its accounting value, which could indicate an undervalued stock. Conversely, a P/BV greater than 1 suggests the market values the company higher than its accounting value.
Based on that argument, I’ve checked which among the 30 bluechip stocks in the Philippine Stock Exchange have a P/BV less than 1 as of market closing on August 30, 2023.
In addition to ranking them, I’m also going to show you their month-to-date Market Sentiment Index so you’ll have a data-driven idea of the confidence level of market participants
10 Undervalued Philippine Bluechip Stocks Based on P/BV Less Than 1
Rank: 10
Stock Code: AGI
Company Name: Alliance Global Group, Inc.
Price-to-Book Value: 0.46
Market Sentiment Index: BEARISH
23 of the 68 participating brokers, or 33.82% of all participants, registered a positive Net Amount
23 of the 68 participating brokers, or 33.82% of all participants, registered a higher Buying Average than Selling Average
68 Participating Brokers’ Buying Average: ₱12.28765
68 Participating Brokers’ Selling Average: ₱12.48985
8 out of 68 participants, or 11.76% of all participants, registered a 100% BUYING activity
12 out of 68 participants, or 17.65% of all participants, registered a 100% SELLING activity
Rank: 9
Stock Code: LTG
Company Name: LT Group, Inc.
Price-to-Book Value: 0.49
Market Sentiment Index: BULLISH
51 of the 76 participating brokers, or 67.11% of all participants, registered a positive Net Amount
47 of the 76 participating brokers, or 61.84% of all participants, registered a higher Buying Average than Selling Average
76 Participating Brokers’ Buying Average: ₱9.36856
76 Participating Brokers’ Selling Average: ₱9.40510
30 out of 76 participants, or 39.47% of all participants, registered a 100% BUYING activity
6 out of 76 participants, or 7.89% of all participants, registered a 100% SELLING activity
Rank: 8
Stock Code: GTCAP
Company Name: GT Capital Holdings, Inc.
Price-to-Book Value: 0.55
Market Sentiment Index: BEARISH
25 of the 91 participating brokers, or 27.47% of all participants, registered a positive Net Amount
27 of the 91 participating brokers, or 29.67% of all participants, registered a higher Buying Average than Selling Average
91 Participating Brokers’ Buying Average: ₱537.30564
91 Participating Brokers’ Selling Average: ₱543.98375
5 out of 91 participants, or 5.49% of all participants, registered a 100% BUYING activity
32 out of 91 participants, or 35.16% of all participants, registered a 100% SELLING activity
Rank: 7
Stock Code: MPI
Company Name: Metro Pacific Investments Corporation
Price-to-Book Value: 0.71
Market Sentiment Index: BEARISH
45 of the 97 participating brokers, or 46.39% of all participants, registered a positive Net Amount
40 of the 97 participating brokers, or 41.24% of all participants, registered a higher Buying Average than Selling Average
97 Participating Brokers’ Buying Average: ₱4.98084
97 Participating Brokers’ Selling Average: ₱4.99671
17 out of 97 participants, or 17.53% of all participants, registered a 100% BUYING activity
21 out of 97 participants, or 21.65% of all participants, registered a 100% SELLING activity
Rank: 6
Stock Code: MBT
Company Name: Metropolitan Bank & Trust Company
Price-to-Book Value: 0.75
Market Sentiment Index: BEARISH
64 of the 89 participating brokers, or 71.91% of all participants, registered a positive Net Amount
27 of the 89 participating brokers, or 30.34% of all participants, registered a higher Buying Average than Selling Average
89 Participating Brokers’ Buying Average: ₱55.79913
89 Participating Brokers’ Selling Average: ₱56.78444
12 out of 89 participants, or 13.48% of all participants, registered a 100% BUYING activity
6 out of 89 participants, or 6.74% of all participants, registered a 100% SELLING activity
Rank: 5
Stock Code: JGS
Company Name: JG Summit Holdings, Inc.
Price-to-Book Value: 0.89
Market Sentiment Index: BULLISH
62 of the 84 participating brokers, or 73.81% of all participants, registered a positive Net Amount
49 of the 84 participating brokers, or 58.33% of all participants, registered a higher Buying Average than Selling Average
84 Participating Brokers’ Buying Average: ₱39.02677
84 Participating Brokers’ Selling Average: ₱39.10922
18 out of 84 participants, or 21.43% of all participants, registered a 100% BUYING activity
2 out of 84 participants, or 2.38% of all participants, registered a 100% SELLING activity
Rank: 4
Stock Code: SMC
Company Name: San Miguel Corporation
Price-to-Book Value: 0.90
Market Sentiment Index: BEARISH
29 of the 72 participating brokers, or 40.28% of all participants, registered a positive Net Amount
19 of the 72 participating brokers, or 26.39% of all participants, registered a higher Buying Average than Selling Average
72 Participating Brokers’ Buying Average: ₱102.86200
72 Participating Brokers’ Selling Average: ₱104.28155
5 out of 72 participants, or 6.94% of all participants, registered a 100% BUYING activity
20 out of 72 participants, or 27.78% of all participants, registered a 100% SELLING activity
Rank: 3
Stock Code: PGOLD
Company Name: Puregold Price Club, Inc.
Price-to-Book Value: 0.91
Market Sentiment Index: BULLISH
56 of the 78 participating brokers, or 71.79% of all participants, registered a positive Net Amount
47 of the 78 participating brokers, or 60.26% of all participants, registered a higher Buying Average than Selling Average
78 Participating Brokers’ Buying Average: ₱27.89903
78 Participating Brokers’ Selling Average: ₱27.98021
30 out of 78 participants, or 38.46% of all participants, registered a 100% BUYING activity
3 out of 78 participants, or 3.85% of all participants, registered a 100% SELLING activity
Rank: 2
Stock Code: UBP
Company Name: Union Bank of the Philippines
Price-to-Book Value: 0.94
Market Sentiment Index: BEARISH
37 of the 62 participating brokers, or 59.68% of all participants, registered a positive Net Amount
29 of the 62 participating brokers, or 46.77% of all participants, registered a higher Buying Average than Selling Average
62 Participating Brokers’ Buying Average: ₱71.66267
62 Participating Brokers’ Selling Average: ₱72.29145
18 out of 62 participants, or 29.03% of all participants, registered a 100% BUYING activity
8 out of 62 participants, or 12.90% of all participants, registered a 100% SELLING activity
Rank: 1
Stock Code: AC
Company Name: Ayala Corporation
Price-to-Book Value: 0.97
Market Sentiment Index: BEARISH
65 of the 93 participating brokers, or 69.89% of all participants, registered a positive Net Amount
39 of the 93 participating brokers, or 41.94% of all participants, registered a higher Buying Average than Selling Average
93 Participating Brokers’ Buying Average: ₱604.11471
93 Participating Brokers’ Selling Average: ₱609.13370
16 out of 93 participants, or 17.20% of all participants, registered a 100% BUYING activity
2 out of 93 participants, or 2.15% of all participants, registered a 100% SELLING activity
Buy the Stock If Its Price-to-Book Value Is Less Than 1?
Avoid making buy or sell decisions based on a single metric or indicator. Check the price trend and market sentiment as well.
For instance, consider a company that is undervalued because its price-to-book value is less than 1. However, if it’s entrenched in a downtrend and its market sentiment is bearish, will it actually generate profit in that particular scenario?
Wouldn’t it make more sense to wait for signs of selling exhaustion before considering the purchase of the stock?
After all, as the price continues to dive, the company becomes even more undervalued relative to its P/BV.
Buy the Stock If Its P/BV Is Less Than 1 and Its Market Sentiment Index Is Bullish?
It can be a ‘yes’ or ‘no,’ depending on your strategy.
Regarding my strategy, I still need to check the other five indicators that constitute my Evergreen Strategy.
If those five indicators also show a bullish trend, I will consider topping up within or near the prevailing dominant range.
For a new position, there are two additional steps I need to take before buying within or near the dominant range. I must calculate my initial trailing stop and my reward-to-risk ratio.
If I am content with my reward-to-risk ratio in relation to my risk tolerance percentage, that’s when I will execute a pilot buy within or near the dominant range.
If you’re interested in one-on-one training with me, please explore my stock investment consultancy service.
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