This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

5 Low Price To Book Value Stocks With Attractive Assets

Stocks in this article: ARCCKROLEAWCGYHOO

In this screen, we looked for cheap stocks trading near book value with promising profitability. Screening stocks using the price to book value ratio yields interesting results but, of course, has its own blind spots. We wanted to find more mature companies with capacity to grow. To do so, these companies must be efficient in using their assets wisely to generate future revenue. 

Criteria in this screen:

  • Market cap. over $2B. Smaller or younger companies may have more assets that haven't 1) depreciated and 2) realized returns.
  • P/B below 2. The number chosen here isn't entirely arbitrary. It's difficult to find a capital-intensive company trading below book that also has above-average ROA. That's next.
  • Enviable ROA. The companies in this screen are generating return on assets in excess of industry competitors. At a glance, these companies are being well-managed from a financial standpoint.
  • Growing ROE.  The last thing we looked at was a positive ROE trend to confirm that net income has lead the way in equity appreciation.

Feel free to use the list below as a starting point for your own research. One thing that can be looked at closer is ROE compared to competitors. A few companies in this list saw ROE drop around 2009. Was this industry-wide or company specific? Lastly, you can always look to dividends as a factor when thinking about companies close to book value. A mature company operating efficiently and growing slowly is bound to pay out its profits.

Companies in this list:

1. Ares Capital Corporation ( ARCC): Ares Capital Corporation is a private equity firm specializing in acquisition, recapitalization, mezzanine debt, restructurings, rescue financing, and leveraged buyout transactions of middle market companies. Market cap at $4.43B

P/B is 1.13. ROE is at 12.87%. TTM Return on Assets at 7.81% vs. an industry average at 2.75%.

ARCC has a nice, even dividen yield at 8.88%. As a financial company, it might be a concern if a lot of assets need to be written down.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,677.90 +216.58 1.32%
S&P 500 1,950.82 +23.71 1.23%
NASDAQ 4,452.7920 +69.9450 1.60%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs