How much above a stock should trade above book value?

For example many IT and internet companies fall in this category. A big reason for this is that their main asset is their work-force and this asset is never captured on the financial books of the company. So it is not uncommon for them to be trading at price to book value much above the figure of 1.5. read more

There is no rule that stock should trade above or below the book value. you will not come to the conclusion that the stock price is undervalued or overvalued in compare with book value. Book value : Asset - Liabilities . read more

Book Value of a company or the price/book value ratio in a sense was a parameter considered to be important by Benjamin Graham, Warren Buffett's mentor. It was one of the factors that he considered important, in the sense that he said that for a investment proposition to be worthwhile, the price to book value of the company should be below 1.5. read more

When the market value exceeds the book value, the stock market is assigning a higher value to the company due to the earnings power of the company's assets. Consistently profitable companies typically have market values greater than book values. read more