Value investing isn't dead, but the traditional value screens - such as price-to-book - often lead to the wrong stocks.
As we wrote in "Danger Zone: Traditional Value Investors," price-to-book screens can easily miss high-quality, undervalued stocks. This week's Long Ideas are two stocks that have expensive price-to-book ratios but are undervalued: Meritor Inc. (MTOR) and Raytheon Company (RTN).
Price-to-Book Misses Undervalued Companies
We've covered the many flaws in price-to-book (P/B) ratios here. Instead of focusing on P/B, investors should use price-to-economic book value (PEBV), a