Book value and current market share price



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i was going through the details of a company named Shipping corporation of India and what i saw is the "Book Value". The question in my mind is, Currently the Share Price is trading @33 and the Book Value is around 142. What does that specify? Shall investor buy this stock as the valuation in Books is good ?

1 Answer(s)


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This means that the stock is trading at a discount to the book value.
Before you buy the stock it is important to understand why is it trading at a discount to the book value. It might be issues such as legal problems, structural problems in the market etc. If it is one of these problems then it does not make sense to buy the stock.

But in your research if you find that the reason is due to a temporary problem that will go away then it might be a bargain buy,

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