Price to Book Value of Profitable Companies in CSE

Introduction

Net Asset Per share is the most straight forward absolute value that any investor can use as an arms length value to evaluate the current stock price. Theoretically NAV can be considered as the general fair value of a stock as it is an Absolute Value indicator. Therefore any stock which is trading above its NAV can be considered "Undervalue" or "Overvalue" otherwise. However there can be special cases where a current stock price can be far higher than the NAV due to reasons such as heavy continuous dividend payment, exceptional growth in earnings etc or current share price will be much lower than the NAV due to lack of earnings or negative perception on the industry in general.

Identifiable good stocks based on PBV

If carefully study the stocks classified under different sectors there are many stocks whose current share price is fairly lower than the current NAV. Following is the sector-wise PBV ratios of profitable companies based on the closing share price as of 26th March 2021. The below list covers all the stocks who has generated profits YTD Dec 2020 but excludes any stock who reports losses for the same period and also excludes the stocks under watch list. Out of the stocks here the ones who has a PBV <1 with good YoY earnings growth will have a high chance of appreciation in the medium term.


Sector-Wise details




 










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