Monday was a day of bloodletting as NFL owners gave pink slips to coaches whose teams' playoff hopes were dashed on Sunday, if not long before that. The decisions can seem pretty cut and dried when it comes down to a team's win-loss record, like the Detroit Lions' 0-16 streak, which cost coach Rod Marinelli his job yesterday.

And the Jets' loss of four of their last five games was too much disappointment for Eric Mangini's bosses to take. Wins and losses are cold, hard facts that can't be argued down.

As in football, stock ratios are cold, hard numbers, usually based on data that can get fudged a bit. Using several ratios to value a stock helps to cover all your bases in case a company's earnings statements look a little too


from quarter to quarter.

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Last week, I looked at the price-to-earnings (P/E) ratio and the P/E-to-growth, or PEG, ratio. Both are good measures of a stock's value taken from the income statement.

Today, I will go over a tool for measuring a stock by looking at the company's balance sheet. That's the price-to-book ratio (P/B). This metric indicates how much the market values the company's assets. A P/B ratio below 1.0 indicates the market values the stock at less than its book value. A high P/B says that the market views the assets as generating growth. A low P/B says the market sees the company as a value stock.

To put price-to-book ratios in perspective, the

iShares Russell 3000 Index

(IWV) - Get Report

has an average P/B of 1.42.

While I usually look for value stocks in terms of price-to-earnings measurements, when it comes to P/B I look for some growth potential. I consider P/B to be a more useful measure for companies with a lot of real estate or capital equipment, like manufacturers, than for asset-light companies.

P/Bs can be a very good value when they are above 1. For example, recent picks


(CSCO) - Get Report



(CAT) - Get Report

each have price-to-book ratios of 2.7;

PPG Industries

(PPG) - Get Report

has a P/B of 1.5.

To get the P/B ratio, you can go to a site like Yahoo! finance. But if you want to calculate it yourself, you can determine a stock's P/B in two ways: Divide its price per share by its book value of equity per share; or divide the company's market cap by the total book value of equity (from the balance sheet).

For my last options call pick,

Cameron International's


-- an equipment supplier to the oil and gas industry -- total stockholder equity of $2.3 billion divided by 219.5 million shares yields a book value of $10.49 a share. Dividing Mondayʼs closing price of $20.02 by $10.49 gives you a P/B of 1.9.

Cameron's P/B reflects the company's better growth outlook relative to its industry, which overall is expected to show a 7.7% earnings drop in 2009. Now let's compare Cameron's P/B to a competitor's.

As a potential pick, I passed up

Weatherford International

(WFT) - Get Report

, which has a forward P/E of 5.3, because earnings are expected to drop by 10.3% in 2009. In fact, Weatherfordʼs low P/B ratio of 0.8 indicates the marketʼs low expectations for the stock.

My deep-in-the-money strategy has led me to my own winning streak of 92-0 for 2008. While I'm still expecting to ring up more wins on open positions in coming weeks, a few of my December wins include $7,100 on


(HAL) - Get Report

, $5,200 on


(NOK) - Get Report

and $2,100 on

Texas Instruments

(TXN) - Get Report


Always remember: Life is a journey, enjoy the ride!

Lenny Dykstra manages Nails on the Numbers, a subscription service sold by Dykstra is 92-0 in his options picks this year. Click here for a free trial to Nails on the Numbers. Dykstra writes regularly about options trades for


At the time of publication, Dykstra had no positions in stocks mentioned.

Nicknamed 'Nails' for his tough style of play, Lenny is a former Major League Baseball player for the 1986 World Champions, New York Mets and the 1993 National League Champions, Philadelphia Phillies. A three time All-Star as a ballplayer, Lenny now serves as president for several privately held businesses in Southern California. He is the founder of The Players Club; it has been his desire to give back to the sport that gave him early successes in life by teaching athletes how to invest and protect their incomes. He currently manages his own portfolio and writes an investment strategy column for, and is featured regularly on CNBC and other cable news shows. Lenny was selected as OverTime Magazine's 2006-2007 "Entrepreneur of the Year."