3 Beaten-Down Stocks Trading Below Book Value. Are They Deals or Value Traps?
Buying a stock at a discount can potentially set up investors for significant gains in the future. And one way to find undervalued stocks is by looking at their price-to-book ratios. If a stock is trading at or below its book value -- its total assets minus its liabilities -- that can mean that there's good value there for investors. But that's not always the case.
A business's assets may be overvalued and thus, the book value may not be all that relevant. And investors often discount a stock with a risky business, and stocks at deep discounts can sometimes end up becoming value traps.
Three stocks that are trading below their book values today are Tilray Brands (NASDAQ: TLRY), Walgreens Boots Alliance (NASDAQ: WBA), and Kraft Heinz (NASDAQ: KHC). Here's a look at how far below book value they trade at, and whether they are really bargains or just value traps.
Source Fool.com
