Book Value per Share:
Book value per share basically tells us the worth of each share. If you buy a share at Rs 100 and its book value is Rs 120, then the share is considered a value-buy.
In financial jargon, book value per share is the value of total assets divided by total number of outstanding shares in the market
Financial Analysts usually compare the book value per share with its market price for fundamental analysis of shares.
If the market price of the stock is lower than the book value, it implies that the share is undervalued. However, if you plan to invest in one such stock then you should understand why the market price of share is lesser than the book value. It could be external factors such as economic slowdown, weak global cues, sectoral issues or an issue with the company itself.
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