Book Value
A Pricey Alternative To The S&P 500?
This month we focus on the valuations of the MSCI USA Index—which is nearly identical to the S&P 500. This is worth following mainly because the folks at MSCI are kind enough to provide us with much longer-term histories of Cash Flow and Book Value Per Share.
Using Book Value in Analysis
In terms of stock screening, companies selling far below book value raise a red flag and deserve very close critical scrutiny. However, when book value is used in combination with other value considerations it can be helpful in recognizing undervalued stocks.
Statistics for Your Files
A number of clients have requested historical data regarding earnings, dividends and book values for the stock market indices. This section provides information, going as far back as 1910.
More Historical Perspective Featuring Book Value Ratios
Book value has its faults as an analytical tool with individual stocks, but it seems to be quite valid in the aggregate as a stock market value gauge. This most recent addition to our value benchmark series presents quarterly book value ratios for the S&P 400 on a quarterly basis, 1929 to date.
View from the North Country
Earnings estimates for the market as a whole are coming down, but not nearly far enough. Clearly the first quarter will be below expectations.
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