Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open.

How come we can find stocks with a Price-to-Book ratio less than 1?
The VDE fund is an energy fund so this is a function of recent price changes in oil (and gas, coal, &c).   For example. Lets say last year when oil was $100 per barrel a bunch of companies saw a good return and put $ 100 million into a bunch of leases, boreholes, pumps, &c to return $10 million per year, and the market says yeah, they're all together worth 100M. Now oil is less, maybe $40 per the link.  These exploration companies don't have a lot of labor or variable costs; they are operationally profitable, may have "use it or lose it" leases or minimum pumping requirements for contract or engineering reasons.  Lets say the cash flow is 7M so the market values them at 70M.  They still have about 100M book value so here we are at .7 and I believe the scenario in the question.  Nobody would invest in new capacity at this oil price.  The well equipment could be repurposed but not the borehole or lease, so the best use is to continue pumping and value it on cash flow.  If an individual well runs negative long enough and goes bust, either a different pumper will pay the minimum price that gives profitable cash flow, or that borehole that cost millions to dig is shut off and rendered valueless.  The CNBC article says some explorers are playing games with debt to maintain yield, so there is that too. In the ETF, your bet is that the market is wrong and oil will go up, increasing future cash flows (or you like the current yield, taking on the risk that some of these oil explorers could go bust).