Also, remember, the shares will likely be priced at some multiple of tangible book value.
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Berkowitz said that even if these prices approached tangible book value he would be unlikely to sell.
Guess? went public at 17 times 1995 earnings and a ridiculously high 25 times tangible book value.
Graham value is applicable only to the companies that have positive earnings and positive tangible book value.
The stock trades at 2.2 times its adjusted tangible book value, 32% below the median ratio for banks.
Year-over-year book value per share increased 8%, and tangible book value increased 12%.
He notes that the stock now trades at just 0.76x tangible book value.
Morgan is trading above its tangible book value, indicating investors doubt the value carried in the balance sheets of the other four.
Analysts at Oppenheimer see value in buying shares of Citigroup at these levels as the stock currently trades below tangible book value.
In another measure, the ratio of price to tangible book value (shareholders' equity minus intangibles like goodwill), Citi is close to typical at 3.6.
Of the southeastern states covered by the data, Arkansas-based banks ranked highest, averaging prices at 186% of tangible book value, followed by Mississippi at 121%.
When looking at Price to Tangible Book Value multiples, you have to ask yourself, what are the risks that Tangible Book Value per Share is overstated.
Publicly traded banks in Louisiana on average saw their stock prices trading at 100% of tangible book value, whereas Georgia-based banks averaged 86% of tangible book.
Goodwill and intangibles result from premiums (over book value) paid by the acquirer in previous acquisitions, and therefore should be deducted to get to true tangible book value.
However, tangible book value per share is a good measure of liquidation value, or the amount that shareholders can reasonably expect to receive should the company go under.
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Really, the wide berth that a lot of investors are giving BofA now can be seen in its share price to tangible book value ratio compared to other banks.
On a price to tangible book value, BAC stacks up well against its competition on a valuation basis, and trades at a bigger discount to tangible book value than all but Citibank.
The market price of each of his top three financial holdings have made significant gains, contributing to his returns last year, but still have a distance to meet their tangible book value.
Wells Fargo ( WFC) and US Bancorp ( USB), however, trade far above their tangible book value, and their non-deposit liabilities make up just 21.7% and 23.2% of their total liabilities, respectively.
Banks with privately traded stock have a difficult time establishing that their stock is worth more than 100% of tangible book value, a commonly used accounting metric in the banking industry, he explained.
Unlike most of its competitors the likes of JP Morgan ( JPM), Citigroup ( C), USB ( USB) and Wells Fargo ( WFC) BofA trades at a significant discount to its tangible book value.
There is a disconnect between the progress made by Morgan Stanley into a lower risk, wealth and asset manager (now half the company) and a stock that trades at over a one-third discount to its tangible book value.
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The one risk in being too negative is the chance that they sell to a larger competitor, though at a nice premium to its tangible book value, the stock is not as attractive as other potential takeover candidates.
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His formula involves adding two main variables: the dealership's assets minus overall debt (also called "net tangible book value"), plus what Hall calls the "blue sky" value, equal to the dealer's pretax income times some multiple between one and six, depending on the health of the operation.
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