RobertA

All else equal, low multiples are better, as they could imply that the stock is undervalued. Different industry have different multiples though, and low P/E and P/BV ratios may be low for a reason.

For example, if a company has low P/E compared to the industry, and this is corrected, the price will rise until the P/E is comparable. If a competitor has a high P/E instead, and that corrects to match the industry, then the price will fall.

The reasoning is the same for both P/E and P/BV