Normally, the market value of a share is much higher than the book value. Recent events, however, have brought on some anomalies.
In case of some stocks, the market value is nearing the book value. In fact, there are some cases where the market price is even lower than the book price.
This means that such stocks are best avoided, as the market does not think much of such companies. The exactly opposite school of thought sees them as good buys, as these are the stocks so devalued that they make good investment opportunities.
More From This Section
BSES is a good example whose book value is Rs 194.28, while its current market price is Rs 199.95. Another company is Grasim, where the current ruling price of Rs 299.90 is close to its book value of Rs 295.28. Gujarat Ambuja Cement barely passes muster with a book value per share of Rs 103.40, while its market price is Rs 155.60.
On the other hand, Hindalco