Zacks.com featured highlights include StoneCo, PagSeguro Digital, KT, Arrow Electronics and CVS Health

For Immediate Release

Chicago, IL – October 16, 2025 – Stocks in this week’s article are StoneCo STNE, PagSeguro Digital PAGS, KT Corp. KT, Arrow Electronics ARW and CVS Health CVS.

5 Low Price-to-Book Stocks Worth Considering in October

In value investing, it is a common practice to pick stocks that are cheap but fundamentally strong. There are a number of investment styles to cater to investors looking for the best value stocks.

Among them, the price-to-book ratio (P/B ratio) is an easy-to-use tool for identifying low-priced stocks that have high-growth prospects.

The P/B ratio is used to calculate how much an investor needs to pay for each dollar of book value of a stock. It is calculated by dividing the current closing price of the stock by the latest quarter's book value per share.

P/B ratio = market capitalization/book value of equity.

The P/B ratio helps identify low-priced stocks with high growth prospects. StoneCo, PagSeguro Digital, KT Corp., Arrow Electronics and CVS Health are some such stocks.

Now, let us understand the concept of book value.

What is Book Value?

There are several ways in which book value can be defined. Book value is the total value that would be left over, according to the company’s balance sheet, if it went bankrupt immediately. In other words, this is what shareholders would theoretically receive if a company liquidates all its assets after paying off all its liabilities.

It is calculated by subtracting total liabilities from the total assets of a company. In most cases, this equates to common stockholders’ equity on the balance sheet. However, depending on the company’s balance sheet, intangible assets should also be subtracted from the total assets to determine book value.

Understanding P/B Ratio

By comparing the book value of equity to its market price, we get an idea of whether a company is under- or overpriced. Like P/E or P/S ratios, it is always better to compare the P/B ratio within industries.

A P/B ratio of less than one means that the stock is trading at less than its book value or the stock is undervalued and, therefore, a good buy. Conversely, a stock with a ratio greater than one can be interpreted as being overvalued or relatively expensive.

For example, a stock with a P/B ratio of 2 means that we pay $2 for every $1 of book value. Thus, the higher the P/B, the more expensive the stock.

But there is a warning. A P/B ratio of less than one can also mean that the company is earning weak or even negative returns on its assets or that the assets are overstated. In such a case, the stock should be shunned because it may be destroying shareholder value. Conversely, the stock’s price may be significantly high — thereby pushing the P/B ratio to more than one — in the likely case that it has become a takeover target, a good enough reason to own the stock.

Moreover, the P/B ratio is not without limitations. It is useful for businesses like finance, investments, insurance and banking or manufacturing companies with many liquid/tangible assets on the books. However, it can be misleading for firms with significant R&D expenditure, high debt, service companies, or those with negative earnings.

In any case, the ratio is not particularly relevant as a standalone number. One should analyze other ratios like P/E, P/S and debt to equity before arriving at a reasonable investment decision.

Here are five of the 15 stocks that qualified the screening:

StoneCo provides financial technology solutions. The company offers an end-to-end cloud-based technology platform to conduct electronic commerce across in-store, online and mobile channels. StoneCo is based in Sao Paulo, Brazil.

STNE has a Zacks Rank #1 and a Value Score of B. STNE has a projected 3-5-year EPS growth rate of 30.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.

PagSeguro Digital provides financial technology solutions and services for micro-merchants and small and medium-sized businesses, primarily in Brazil and internationally. The company offers multiple digital payment solutions, in-person payments via point-of-sale devices and prepaid card services. PagSeguro Digital is headquartered in Sao Paulo, Brazil.

PagSeguro Digital has a projected 3-5-year EPS growth rate of 14.2%. PAGS currently has a Zacks Rank #1 and a Value Score of B.

Headquartered in Sungnam, South Korea, KT Corporation provides telecommunication services. Its services include mobile telecommunications services, telephone services, fixed-line and VoIP telephone services.It also provides interconnection services to other telecommunications companies, broadband Internet access services and other Internet-related services. It also offers information technology and network services.

KT has a Zacks Rank #2 and a Value Score of A. KT Corporation has a projected 3-5-year EPS growth rate of 51.7%.

New York-based Arrow Electronics is one of the world’s largest distributors of electronic components and enterprise computing products.

Arrow Electronics has a Zacks Rank #2 and a Value Score of A at present. ARW has a projected 3-5-year EPS growth rate of 20.7%.

Headquartered in Woonsocket, RI, CVS Health (formerly known as CVS Caremark Corporation) is a pharmacy innovation company with integrated offerings across the entire spectrum of pharmacy care.

CVS Health presently has a Zacks Rank #2 and a Value Score of A. The company has a projected 3-5-year EPS growth rate of 14.3%.

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The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.

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For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2769365/5-low-price-to-book-stocks-worth-considering-in-october

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

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