Diving Into Book Value: 5 Underpriced Stocks Worth Exploring This February

Value investing doesn’t need to be complicated, but it does require looking beyond surface-level metrics. While earnings-per-share figures and revenue growth rates provide useful snapshots, truly finding undervalued opportunities demands a more comprehensive approach. One often-overlooked but remarkably effective tool in this toolkit is the price-to-book ratio—a straightforward metric that can reveal stocks trading significantly below their intrinsic worth. Combined with rigorous fundamental analysis, examining book value helps investors identify companies where the market may have mispriced potential.

This February presents an interesting opportunity to examine five stocks trading at attractive price-to-book levels while demonstrating strong growth trajectories and favorable analyst ratings. These candidates—Invesco Ltd [IVZ], Harmony Biosciences [HRMY], Concentrix Corporation [CNXC], Patria Investments Limited [PAX], and Global Payments Inc [GPN]—each qualify through multiple valuation screens and show compelling fundamentals worth monitoring.

Beyond the Surface: Understanding Book Value in Stock Selection

What exactly is book value, and why should investors care? Think of it as the theoretical bottom line—the amount shareholders would theoretically receive if a company liquidated all its assets today, paid off every creditor, and distributed what remained. From an accounting perspective, book value equals total assets minus total liabilities, though intangible assets typically need adjustment depending on the company’s balance sheet composition.

The price-to-book ratio, calculated as market capitalization divided by equity book value, creates a revealing comparison. When the P/B ratio falls below 1.0, the stock trades at less than its accounting value—theoretically a bargain. Conversely, ratios above 1.0 suggest the market is paying premium prices, though this doesn’t automatically mean overvaluation. A stock trading at two times book value might command that price precisely because it’s earning superior returns on its assets or has become a takeover target.

However, book value has important limitations. It works brilliantly for asset-heavy industries like banking, insurance, and manufacturing where tangible assets dominate the balance sheet. For research-intensive, service-oriented, or highly leveraged firms, book value becomes far less reliable as a valuation anchor. This is precisely why sophisticated investors combine P/B analysis with price-to-earnings ratios, price-to-sales metrics, and PEG ratios before making investment decisions.

Why Low Price-to-Book Ratios Matter for Value Hunters

Investors screening for underpriced securities typically start by filtering for companies where the price-to-book ratio trails the industry median. A depressed book value multiple relative to peers suggests either temporary weakness or genuine opportunity—distinguishing between the two requires deeper analysis.

The screening criteria used to identify this month’s candidates incorporated multiple filters: a price-to-book ratio below the industry median, a price-to-sales ratio similarly positioned below peer averages, forward-looking price-to-earnings estimates that are discounted relative to the sector, and PEG ratios below 1.0 (indicating that growth prospects justify the valuation). All candidates maintained stock prices above $5 with average trading volumes exceeding 100,000 shares daily, ensuring reasonable liquidity. Finally, each earned either a Zacks Rank of #1 (Strong Buy) or #2 (Buy), combined with Value Scores of A or B—a combination that historically has identified the most compelling value opportunities.

Five Compelling Candidates: The Companies with Strong Book Value Foundations

Invesco Ltd (IVZ), headquartered in Atlanta, operates as a global independent investment manager offering diversified products across equities, fixed income, and alternatives. The company carries a Zacks Rank #1 rating and a Value Score of B, with projected three-to-five-year earnings-per-share growth of 20.9%. This growth rate suggests that current book value metrics may understate future earning power.

Harmony Biosciences (HRMY), based in Plymouth Meeting, Pennsylvania, specializes in therapies targeting rare neurological disorders—a focused market position within pharmaceuticals. HRMY holds a Zacks Rank #1 and an elite Value Score of A. The company projects three-to-five-year EPS growth of 27.11%, among the strongest in this screened group. For biotech companies, strong book value fundamentals combined with high growth rates often signal pipeline strength.

Concentrix Corporation (CNXC), operating from Newark, California, provides technology-enabled business services across customer experience, back-office operations, and specialized consulting. CNXC currently holds a Zacks Rank #2 and Value Score of A, with projected three-to-five-year EPS growth of 8.76%. The company’s service model means tangible book value takes a back seat to intangible assets and customer relationships—making the confluence of low P/B and strong analyst ratings particularly noteworthy.

Patria Investments Limited (PAX), based in Grand Cayman, operates as a premier private markets investment manager focused on Latin America. The firm manages capital across private equity funds, infrastructure development, co-investments, and real estate/credit strategies. PAX carries a Zacks Rank #1 and Value Score of A, with projected three-to-five-year EPS growth of 15.39%. For alternative asset managers, book value metrics carry particular significance in reflecting the real value of managed assets.

Global Payments Inc (GPN), headquartered in Atlanta, ranks among the world’s leading payment technology and software providers, serving merchants, financial institutions, and consumers globally. GPN holds a Zacks Rank #2 with a Value Score of A, projecting three-to-five-year EPS growth of 11.54%. As a software-driven payments platform, book value considerations matter less than technology moat and recurring revenue streams—yet the convergence of low P/B with strong growth prospects suggests meaningful upside potential.

Screening Criteria: How These Stocks Qualified

These five companies survived rigorous quantitative filtering designed to isolate genuine value opportunities. Each demonstrated a price-to-book multiple below its industry median—the fundamental screen for identifying stocks where book value suggests significant discount potential. Complementary screens included price-to-sales ratios below peer averages, forward P/E estimates trailing the sector, and PEG ratios signaling that projected growth justifies the valuation.

The Zacks Rank system, which has substantially outperformed the S&P 500 since 2000 with average annual gains of 48.4%, 50.2%, and 56.7% (depending on the specific strategy), provided an additional quality filter. Stocks rated #1 or #2 by Zacks have historically outpaced broader indices regardless of market environment. When combined with Value Scores of A or B—Zacks’ proprietary valuation assessment—these holdings represent the intersection of analyst conviction and fundamental value.

February offers a timely moment to examine companies where book value metrics align with near-term catalyst potential and long-term growth expectations. Whether these stocks ultimately deliver gains depends on factors beyond any single valuation metric, yet their combination of depressed P/B ratios, strong projected growth, and positive analyst sentiment warrants serious consideration by value-oriented investors.