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    Low Price To Book Stocks: 50 'Risky' Candidates To Consider

    Mon, 08/29/2011 - 10:57 EDT - Seeking Alpha
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    By Value Research:Academic studies have shown in multiple time frames, in multiple markets, that there is a value effect. Stocks that sell at the deepest discounts to accounting values of their equity, have enjoyed higher returns than stocks that sell at the highest premiums to their equity values. On the basis of overwhelming empirical evidence, the price to book ratio is a useful starting point for value investing. However, these stocks suffer incredible risks. Many of these stocks are on the verge of bankruptcy, have lagged financial statements which do not accurately portray current equity values, or cannot be rationally valued on the basis of reported financial statements. Since the price-to-book ratio has been connected to long-term returns, is there a long-term measure of risk we can use? Are there methods that can help distinguish value investments from value traps? One predictive measure of bankruptcy is the Altman Z-Score. This score placesComplete Story »

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    Related

    • November's Low Price To Book Stocks Vs. Bankruptcy Risks

      By Value Research:Academic studies have shown in multiple time frames, in multiple markets, that there is a value effect. Stocks that sell at the deepest discounts to accounting values of their equity have enjoyed higher returns than stocks that sell at the highest premiums to their equity values. On the basis of overwhelming empirical evidence, the price-to-book ratio is a useful starting point for value investing.

    • Evaluating Long Candidates With Price-To-Book Ratios And Altman's Z-Score

      By Value Research:Stocks that sell at the deepest discounts below accounting values of their equity (the lowest price-to-book ratios) have enjoyed higher returns than stocks that sell at the highest price-to-book ratios. On the basis of overwhelming empirical evidence, the price-to-book ratio is a useful starting point for long-term value investing.

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      By Value Research:Value investors may be dissuaded by the 2012 stock market rally and the Federal Reserve's open-ended quantitative easing announcement. They might worry that the upside of investing in the stock market is outweighed by the downside as price multiple expansion has ruined many buying opportunities.

    • 2012's Top Dividend Stocks To Beat Treasuries

      By Dividend Dog: In today's low-interest-rate environment, investment-grade corporate bonds and government bonds offer very low yields. Investors seeking additional income in today's markets are tempted to purchase high yield debt and dividend-yielding stocks. Fixed income investors should realize that there is nothing for free, and that there are risks associated with higher returns. Investors should attempt to understand and weigh the risks of their holdings.

    • 2012's Top Dividend Stocks To Beat Treasuries

      By Dividend Dog: In today’s low interest rate environment, investment-grade corporate bonds and government bonds offer very low yields. Investors seeking additional income in today’s markets are tempted to purchase high-yield debt and dividend-yielding stocks. Fixed income investors should realize that there is nothing for free, and that there are risks associated with higher returns. Investors should attempt to understand and weigh the risks of their holdings.

    • 45 Dividend Stocks with Good Credit Scores

      By Value Research:In today’s low interest rate environment, investment-grade corporate bonds and government bonds offer very low yields. Investors seeking additional income in today’s markets are tempted to purchase high yield debt and dividend-yielding stocks. Fixed income investors should realize that there is nothing for free, and that there are risks associated with higher returns. Investors should attempt to understand and weigh the risks of their holdings.

    • Alpha Natural Resources: Estimating Risk Using The Altman Z-Score

      By Paulo Santos:Given the ongoing panic in coal shares, I decided to do a series which will look at several coal stocks using the Altman Z-score. The purpose will be to get a feel for the relative risk of each coal stock. This article will be on Alpha Natural Resources (ANR). The Altman Z-score, as defined by Wikipedia, is:

    • Estimating The Risk Of Arch Coal Using The Altman Z-Score

      By Paulo Santos:Given the ongoing panic in coal shares, I decided to do a series which will look at several coal stocks using the Altman Z-score. The purpose will be to get a feel of the relative risk with each coal stock. I will start with Arch Coal (ACI). The Altman Z-score, as defined by Wikipedia, is:

    • Estimating The Risk Of Peabody Energy Using The Altman Z-Score

      By Paulo Santos:Given the ongoing panic in coal shares, I decided to do a series which will look at several coal stocks using the Altman Z-score. The purpose will be to get a feel for the relative risk of each coal stock. This article will be on Peabody Energy (BTU). The Altman Z-score, as defined by Wikipedia, is:

    • 3 Attractive, Low P/E Ratio Stocks And More With Safe Credit Scores

      By Value Research: Three Attractive, Low P/E Ratio Stocks Many value investors use the price-to-earnings ratio as a measure of cheapness and buy stocks with low P/E ratios to maximize earnings yield. This strategy seems obvious, but there is a catch: many cheap, low P/E stocks bear incredible risks. Some are on the verge of bankruptcy.

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