No. of Recommendations: 4
Do you mean book value > 0?No.
"and those with earnings > 0 and book value is < 0."
IIRC, the rationale was that BV < 0 means that the company has had such financial success that its book value has gone negative. Of course, it could be a troubled company, so you want to only look at one that have positive earnings.
Here is an article:
osam.com - Negative equity veiled value and the erosion of price to book"Negative equity companies are often written off as distressed, but after reporting negative equity, most of them survive for years and have, as a group, outperformed the market 57% of the time. in rolling 3 years periods from 1993 to 2017."
