In today’s briefing:
- It Is Time to Identify True Value and Growth Stocks Rather than High and Low P/Bs
It Is Time to Identify True Value and Growth Stocks Rather than High and Low P/Bs
- If a company with P/B less than 1 conducts share buyback, its P/B will decrease; if a company with P/B greater than 1 conducts share buyback, its P/B will increase.
- A company with P/B below 1x can be a great value stock if it can demonstrate to investors that it will generate ample cash flow, in addition to repurchasing shares.
- Even if a company’s P/B is well above 1x, it is required to explain to investors whether there are any gaps in its cash flow growth scenario.
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