Price to Net Asset Value
P/NAV ratio shows how expensive share is compared to its NAV (net asset value). This ratio is very similar to P/B ratio but in this case market values (not book values) are used. Mostly P/NAV is used for valuation of real estate companies.
P/NAV ratio is much better than P/B ratio, but is harder to get. However, P/NAV employment in practice can be seen in valuation of real estate (property) investment companies. P/NAV is used for both: investment in property companies and property development companies. But for development companies this ratio isn’t so accurate, because in many cases, NAV provided (in annual reports) by companies is calculated under discounted forecasted cash flows and sometimes may be very far from reality.
Normally, if P/NAV is lower than 1, it is a good sign. But P/NAV is more trustful when real estate portfolio is consisted not from land, but from ready cash generating property investments. Mostly P/NAV depends on market conditions and it development expectations.
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