A question on my mind for a while is: what features of a company makes measuring P/B value the most useful valuation metric compared to other metrics like P/E, P/S, etc?
We consider P/B to be useful for valuing Berkshire, but Jim has pointed out before that seeking low price/book can be a very poor screening criteria for many companies because it can flag companies with high levels of assets yet weak growth. Whereas very high price/book can be indicative of some really good companies that are able to earn a lot with very little assets (a great business).
In contrast, Jim’s stated before that he considers a good valuation metric for a company like Alphabet to be price/sales.
What I’d be fascinated to learn/read about is: what characteristics makes price/book a good valuation tool for one company, price/sales for some and good old fashioned P/E for others. Has anyone come across something like this?