In terms of the price-to-book value ratio, this means that if the P/B ratio is below 1.0, the company is being valued lower on the ​stock exchange than its book value. The simple conclusion being that a stock with a P/B ratio below 1.0 is worth buying. However, as you may already suspect, it’s unfortunately not that simple. It can happen that a company’s stock price on the stock market falls below the book value per share (resulting in a P/B ratio below 1.0), and this can occur not only temporarily but also over the long term. This ratio unfortunately does not serve as an “absolute buying criterion” in the sense of “stock price falls below book value per share, so buy”. A low P/B ratio alone is not sufficient as a buying argument. In addition, there are industries such as insurance, trade, or utilities that traditionally have low P/B ratios, while stocks from sectors like internet, semiconductors, or software tend to have high P/B ratios.