Their shares trade at a discount to the other Italian banks because of their takeover-resistant structure, and they lack economies of scale.
Another approach is to acknowledge that some closed end funds will always trade at discounts and that comparing the current discount to its one-year average discount will eventually result in funds returning to their average discounts.
On a price-to-book basis, shares currently trade at 1.34x, a 47% discount to the industry average of 2.53x.
The shares have climbed more than 35% since, yet still trade at a discount of 23% to book value, the difference, or net worth, between its assets and its liabilities.
The company's shares trade in lockstep with the price of oil and at a discount to more well-rounded (but less profitable) competitors Jacobs Engineering and Fluor.
"If you look at our stock and you do some analysis on it, the multiples that we trade at, the valuation that we trade at, in my opinion, is at a discount to our comps, " he said.
He notes that the stock continues to trade at a discount to its peers, such as Kroger (KR) and Safeway (SWY) based on p-e ratios and price-to-EBITDA (earnings before interest, taxes, depreciation and amortization) multiples.
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The opposite trade occurs when ETF shares trade at a discount to their underlying securities.
One is to invest in closed-end funds that trade at the highest absolute discount from their net asset value.
For example, even with their recent surge, nearly all of the top gainers in the Forbes Investor over the past six weeks continue to trade at historically low valuations and at a discount to their larger peers.
As a result of the power of compound interest, the choice of discount rate used to estimate the potential economic costs of climate change is more important for purposes of understanding the trade-offs associated with competing climate-change policy options than perhaps any other single issue in climate change economics.
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Shares of Digital Realty currently trade at 14.4x 12-month forward earnings, a 3.4% discount to the peer group average of 14.9x.
Shares of American Water Works currently trade at 16.89x 12-month forward earnings, an 8.8% discount to the peer group average of 18.53x.
The reason firms don't do that is to avoid a significant overhang in the stock, which means other shares trade nervously, and at a discount.
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