Strategy Intermediate: Value Investing

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1.
A low price-to-book (P/B) ratio means _______.
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Less than 1. Mathematically, it means less than 1.
2.
A value stock is issued by a company that _______.
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Has the resources to grow. A careful review reveals that it will likely grow in the future, even during economic downturns.
3.
For value investors, which of the following would be the least helpful in evaluating a company?
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Quarterly sales. A value investor usually focuses on factors that reveal the fundamental capacity and potential of the company over the long term.
4.
Value investors identify variables that may push up the price of a value stock in the next two or three years.
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False. Value investors identify variables that may push up the price of a value stock in the near future.
5.
There are reasons why a low price-to-book ratio may not be a good thing for investors. Which of the following is not one of those reasons?
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The company is earning a high return on its assets. This is actually a good thing for investors.