Low price-to-book Buffett stocks

[raylopez99]

While I don't trust the numbers for "book value" (always cooked IMO),
you can if you like try the below approach.

I hold BAC, my contrarian bet that the financial crisis will blow
away.

RL

http://www.thestreet.com/_yahoo/s/best-buffett-stocks-by-book-value/newsanalysis/stockpickr/10392911.html?

Stockpickr has reviewed the list of stocks held by Warren Buffett's
Berkshire Hathaway and sorted out the stocks with the lowest price-to-
book ratios into the Best Buffett Stocks by Book.
http://www.stockpickr.com/port/Best-Buffett-by-Book/

The Buffett stock with the lowest price-to-book is Wesco Financial
(WSC - Cramer's Take - Stockpickr), which is involved in three
businesses: property and casualty insurance, furniture rental and
steel. It has a price-to-book of 1.1. The company earlier this month
reported a 3.8% increase in net earnings. The stock has a price-to-
earnings (P/E) ratio of 32 and a yield of 0.4%.

Another low P/B-ratio Buffett stock is ConocoPhillips (COP - Cramer's
Take - Stockpickr), which has a price-to-book of 1.5. The company is
planning a natural gas pipeline running from Alaska's North Slope to
the U.S., which would reportedly be the largest pipeline in the world,
at a cost of $42 billion. ConocoPhillips has a P/E of 12.4 , a P/E-to-
growth (PEG) ratio of 0.8 and a yield of 2.1%.

ConocoPhillips is also a stock that's liked by money manager and
Forbes columnist Ken Fisher. Fisher, who manages $30 billion, also
likes China Mobile (CHL - Cramer's Take - Stockpickr), which has a
price-to-book of 7.8, Schlumberger (SLB - Cramer's Take - Stockpickr),
with a 7.8 P/B, and Transocean (RIG - Cramer's Take - Stockpickr),
which has a 4.6 P/B.

Bank of America (BAC - Cramer's Take - Stockpickr), another Buffett
stock, has a P/B of 1.5. BofA also has a P/E of 10, a PEG of 1.6 and a
yield of 5.7%.

Bank of America is favored by another Forbes columnist, the famous
contrarian, David Dreman. The chairman of Dreman Value Management also
likes Altria Group (MO - Cramer's Take - Stockpickr), which has a P/B
ratio of 9.3, Freddie Mac (FRE - Cramer's Take - Stockpickr), with a
1.1 P/B, and Devon Energy (DVN - Cramer's Take - Stockpickr), which
has a 1.8 P/B.

To see all 10 of the Warren Buffett stocks with low price-to-book
ratios, check out the Best Buffett Stocks by Book at Stockpickr.com.
And for his entire stockholdings, be sure to visit the Warren Buffett
portfolio.

[JOSE BAILEN]

In fact, Im reading now a book -the EVA challenge- that actually makes
the point that accounting criteria and rules are too conservative...
For instance; to obtain the book value of a building, the rule is that
it is the lesser of its market value or its cost value minus
depreciation. So, if you bought a building in 1970 at -say- a price of
1 million dollars; and the depreciation has been 50 percent since
then, then it should be valued at a book value of just 500.000 even if
in most cases the market value is far superior than this. The reason
is because accounting rules are made to protect the claims of debtors
rather than to reflect true value, this is why they are so
conservative.

Another distortion are R&D expenditures, advertisement expenditures or
the cost of employees training. According to the accounting rules;
they are costs -and therefore reduce reported earnings- while it can
be easily made the case that they are investments.This is one of the
reasons why pharmaceuticals or high-tech companies with plenty of R&D
expenditures usually trade at a very high P/E.