How tightly correlated is a company's stock price to its book value?

ChaosNantuko answered 4 months ago …

Its a very weak correlation... i'm sure it would work better with some industries then others, but you have to remember that almost all the popular methods of valuing a company have very little to do with book value.
Theres discounted earnings analysis, discounted cash flow, assigning a relavent P/E based on earnings growth and expected future earnings growth, and other methods, but most of them rely on earnings, or cashflows, or revenues, which have little to do with the book value.
The big problem with book value is it isn't often a very accurate measurement. Its not adjusted for inflation, so fixed assets that have been held for a very long time frequently have very different book values then actual values.
In my opinion, the only use for book value is in determining barriers for entry into an industry. If the book value of all the companies in the industry is extremely high, then its harder for new companies to enter that industry. If its low, then the companies in the industry could potentially have issues with new companies offering competition.