Five Undervalued Stocks with Strong Fundamentals: A Price-to-Book Analysis for February 2026

Identifying stocks that are genuinely trading below their intrinsic value requires more than surface-level number crunching. While traditional metrics like earnings per share and revenue growth can reveal underperforming equities, a comprehensive multi-metric analysis is critical to confirming whether a company truly represents a value opportunity. Among various screening tools at investors’ disposal, the price-to-book (P/B) ratio—often overlooked in favor of P/E and P/S metrics—provides a straightforward yet powerful method for spotting competitively valued securities with genuine upside potential. This metric is calculated by dividing a company’s market capitalization by its total shareholders’ equity. Through this lens, five compelling opportunities emerged in February 2026: Invesco Ltd (IVZ), Harmony Biosciences (HRMY), Concentrix Corporation (CNXC), Patria Investments Limited (PAX), and Global Payments (GPN).

Understanding the Foundation: Book Value and Shareholders’ Equity

Before diving into the P/B analysis, it’s essential to grasp what book value represents. In accounting terms, book value equals total company assets minus all liabilities—essentially what shareholders would theoretically receive if the company were liquidated immediately and all obligations settled. On a company’s balance sheet, this typically corresponds to common equity. However, refinement may be necessary: intangible assets should sometimes be deducted from the asset total to arrive at a true book value figure.

This foundational number serves as the denominator in our valuation equation. When market price is divided by this book value, we obtain insight into whether the market is pricing the company at a discount or premium relative to its accounting value.

The Power and Pitfalls of Price-to-Book Ratios

When examining the relationship between what the market pays versus what the company’s balance sheet reveals, the P/B ratio illuminates potential mispricings. A ratio below 1.0 suggests the stock trades at a discount to its accounting value—traditionally interpreted as undervalued and potentially attractive. Conversely, a ratio above 1.0 indicates the market is willing to pay a premium, as occurs with the example of a stock trading at 2.0 times book value, where investors pay $2 for every $1 of reported equity.

However, this straightforward interpretation demands scrutiny. A sub-1.0 ratio can signal trouble: the company may be generating weak or negative returns on assets, or its recorded assets may be inflated. In such scenarios, the low valuation may reflect justified market skepticism rather than opportunity. Conversely, a premium valuation occasionally proves warranted—perhaps the company has become a takeover target or possesses hidden value in intangible assets and intellectual property.

The P/B metric also exhibits sector-specific limitations. It works well for capital-intensive industries like banking, insurance, manufacturing, and finance, where tangible assets dominate. For service firms, technology companies with substantial R&D spending, firms carrying high debt loads, or those with negative earnings, the P/B ratio can be misleading. This underscores why sophisticated investors never rely on P/B in isolation; complementary analysis using P/E, price-to-sales, and debt-to-equity ratios remains essential.

Rigorous Screening Criteria: How These Five Were Selected

To identify securities worthy of close examination, a multi-factor screening framework was applied. The qualifying criteria included:

• Price-to-Book Valuation: Stock P/B must fall below the industry median, indicating room for potential appreciation relative to peers
• Price-to-Sales Efficiency: P/S ratio should remain below industry average, showing the market values the company’s revenue generation favorably
• Forward Earnings Valuation: Forward-looking P/E ratios must stay beneath industry benchmarks, suggesting reasonable compensation for anticipated growth
• Growth-Adjusted Valuation: PEG ratio below 1.0, which links the P/E multiple to expected earnings growth trajectory and reveals whether a stock is truly inexpensive relative to its growth prospects
• Trading Liquidity: Minimum $5 stock price with average 20-day trading volume of at least 100,000 shares, ensuring the positions can be easily entered and exited
• Research Consensus: Zacks Rank rating of #1 (Strong Buy) or #2 (Buy), reflecting analyst conviction that these stocks will outperform irrespective of broader market conditions
• Value Scoring: A Zacks Value Score of A or B, which when combined with top-tier Zacks rankings, has historically identified the most compelling value opportunities

These criteria work together systematically to isolate candidates that are both statistically inexpensive and fundamentally sound.

Five Quality Picks: A Closer Look

Invesco Ltd. (IVZ) operates as an independent global investment manager headquartered in Atlanta, Georgia. The firm offers a comprehensive suite of investment products and services across multiple asset classes. With a Zacks Rank #1 and Value Score of B, IVZ demonstrates analyst confidence in its prospects. The company projects earnings-per-share growth between 3 and 5 years of 20.9%, indicating management expectations for solid expansion.

Harmony Biosciences (HRMY), based in Plymouth Meeting, Pennsylvania, focuses on developing and commercializing therapies addressing rare neurological conditions. Earniing both a Zacks Rank #1 and a Value Score of A, the company stands out for its research quality and valuation appeal. HRMY projects a 3-5 year EPS growth rate of 27.11%, among the highest of this cohort, reflecting confidence in its pipeline advancement and market adoption.

Concentrix Corporation (CNXC), headquartered in Newark, California, provides technology-enabled business services spanning multiple verticals and geographies. The company holds a Zacks Rank #2 and maintains a Value Score of A. With a projected 3-5 year EPS growth rate of 8.76%, Concentrix offers more moderate but stable anticipated expansion, appealing to investors seeking steadier returns.

Patria Investments Limited (PAX), domiciled in the Cayman Islands, operates as a private markets investment platform with primary focus on Latin American opportunities. The firm manages private equity, infrastructure, co-investment, and real estate credit funds. Ranking #1 with Zacks and scoring an A for value, PAX projects 3-5 year EPS growth of 15.39%, positioning it attractively between conservative and aggressive growth expectations.

Global Payments (GPN), headquartered in Atlanta, Georgia, ranks among the world’s leading payment technology and software providers. The company delivers processing solutions and software to merchants, financial institutions, and consumers globally. With a Zacks Rank #2 and Value Score of A, GPN projects 3-5 year EPS growth of 11.54%, supported by the secular shift toward digital payment adoption worldwide.

Tempering Expectations: Important Caveats

While these five securities meet rigorous screening criteria, value investors must maintain perspective. A low P/B ratio is not a guarantee of future performance. Historical evidence shows that since 2000, disciplined value strategies have averaged gains of approximately 7.7% annually versus broader market benchmarks, with top-quartile strategies achieving 48.4%, 50.2%, and 56.7% annualized returns respectively. However, such exceptional results are not assured.

Investors should recognize that P/B, while useful, remains one tool among many. Complementary fundamental analysis, consideration of competitive positioning, management quality, and macroeconomic context should inform any investment thesis. Additionally, market conditions and sentiment can sustain undervaluation or rapidly reprrice securities, so timing and conviction matter.

These five stocks merit monitoring for their compelling valuations and analyst support, but due diligence and portfolio positioning remain essential before any capital deployment.