For this project I need to choose 5 extreme value stocks. Value in this case is represented by Book/Market ratios (B/M) above 1.25 or Price/Book ratios (P/B) less than 0.80. Use the screening tools on the web site of your choice. Then I need to say I choose those stocks exactly andexplain the rationale behind this method of portfolio selection.

I am not sure what is meant by extreme value stock? It is simply a a really good value stock? The professor also stated "No undervalued stock? but I thought that any stock with a p/b of less than 0/80 is undervalued. I am joining the assignment requirements and an article that our professor told us to read.

I am really confused.

FINA 3303 Spring 2016 Project 2 Due Thursday, February 4 Portfolio Selection: Value Stocks For this project you are to choose 5 extreme value stocks. Value in this case is represented by Book/Market ratios (B/M) above 1.25 or Price/Book ratios (P/B) less than 0.80. Use the screening tools on the web site of your choice. Yahoo! Finance and FINVIZ have the best. Note: Due to the unique character of the balance sheets of the financial industry, if you include banks, bank holding companies, or insurance companies, you must use book-market ratios that are in the lower quartile for their industry. Also, avoid stocks currently in bankruptcy proceedings. Your report to me should include the following: Page 1. Rationale. As always, WHY? Briefly explain the rationale behind his method of portfolio selection. Refer to my lecture on the Fama and French article and on Haugen's discussion of value stocks in the handout. You may also cite any evidence obtained from Internet sites on the topic. There are many. Note that we are dealing with extreme value stocks - not undervalued stocks. Page 2. Table. On a separate sheet, provide a table, using the template, which includes information on all five stocks in an order that facilitates comparisons across firms and within industries. You need to list: name and ticker symbol of each stock, sector, industry, dividend yield, annual EPS - TTM and estimated, beta, total market value of equity (capitalization), number of shares outstanding, total owners' equity (book value), book value per share, closing price on the day the portfolio was created, the book-to-market ratios of the firm and its industry (you may state the more common price-to-book ratio if you prefer), target price estimate, Forward P/E ratio, and PEG ratio. Don't forget the value of the S&P 500 and the treasury bill yield. Pages 3-7. A one-page summary for each stock. Each summary should note its P/B in relation to its industry. Feel free to add any information that helps justify your choices! Your report for each stock should provide a brief description of the company, a brief analysis (provided by the source of your choice), and the source(s) of your information. There are a lot of high B/M (low P/B) stocks out there. You must justify your five choices. For example, are your firms in industries that are poised for turnaround? Are the firms potential takeover candidates? Are they financially sound? What do analysts say? Also, for each stock you choose, answer the question, \"Why is this stock's B/M high (P/B low)?\" You must provide specific reasons! Pages 8+. Appendix. Include brief documentation from your source. Include the Profile page for each stock and one page for each security supporting only your book and market values (shares outstanding and book value of equity) in an appendix. With the exception of items stating \"if available\