Sleepers



*S T O C K F U N D A M E N T A L A N A L Y S T*	STOCK	FUNDAMENTAL	ANALYST

Y o u r I n v e s t m e n t B e g i n s W i t h F u n d a m e n t a l s !

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The Search For The Sleeper

Illusive Picking

Generally investors will scan the market looking for that next best investment, at the best possible price. Scanning the market is that method we all strive to perfect. But, what are we looking for exactly?

EPS, is one method to locate such sleeping giants. While the value of the EPS is important enough to consider and gauge a good investment by, it should not be the only factor in the decision. There are many other aspects of fundamentals that need to be considered, however one can certainly stand out in combination with other factors, such as current price, historical price movement and book value.

Here we are presented with yet another fundamental aspect of the finances however this is now reverting back to the market itself. By that we look at what is the market actually paying for a share in a company relevant to the company's book value.

The P/B Ratio (Price to Book Ratio) is the measure of the market itself. Investors looking for the next Blue Chip hot stock will scan the market looking for the next valued investment that the market has simply forgotten about.

Many of these investors will become quite wealthy beyond their dreams locating such sleepers while holding them ever so close for the long term as the company goes about its business. One day and without prior warning some analyst will see this sleeper in the scan and the stock becomes the next hot stock, while the smart value investor now pockets the benefits.

A value investor searches using a specific indicator besides earnings. One such fundamental indicator is P/B Ratio or Price to Book Ratio. Book value is the absolute worth of a company. After all would a business entrepreneur buy a company for twenty million dollars if it was only worth half?

P/B Ratio is the measure of value the market itself places on the particular share, this indicator looks at the value the market places on the book value of a company. Unlike the P/E Ratio, the lower P/B the better the value, in other words the share price is already discounted relevant to the company value. Investors would then use the low P/B in screening the market in order to identify the potential investment.

Stock Fundamental Analyst, uses this calculation within it's matrix to calculate the P/B Ratio for you. You simply insert the relevant figures where appropriate and the Ratio is provided. The Lower the Ratio the better the value of the stock investigated compared to the company value.