They also say that low price-to-book ratios typically reflect financial problems, another reason for investors to demand higher returns.

To do that, he compares an industry group's price-to-book ratio with its historical average.

At that time, the portfolio had an average price-to-book ratio of 6.9 and its price-to-cash flow was 20.

Because of these criteria, growth stocks tend to have high price-to-earnings and price-to-book ratios.

A more appropriate measure for these investing companies is the price-to-book ratio, which compares a company's stock price with its net assets per share.

To start, calculate your portfolio's price-to-book ratio, the indicator most often used to differentiate growth and value.

Say your index is the Russell 1000, whose median price-to-book ratio is 2.7.

The fund's price-to-book ratio is 1.8, versus 4.7 for the index.

Stocks that trade at very low price-to-book ratios, for example, tend to have above-average performance.

Those scoring between 4 and 5 were the most value-oriented - their average picks had low price-to-book ratios.