Wednesday, 3 May 2017

The Market Is Quick In Spotting Hidden Gems

The market is quick in spotting hidden gems and according to analysts, this gets reflected in stocks which are trading significantly above their book value.

Book value is an accounting measure which is calculated as total assets minus intangible assets such as patents, goodwill and liabilities.

If any stock is trading above its respective book value could be considered risk, but analysts say that market is attributing higher valuation to the future growth rate of the company.

“When stocks are trading premium to their book value means that market is ascribing significant value to its future growth.

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