0:47 P/E = price-to-earnings (price divided by earnings) 1:06 In general, a lower P/E ratio is considered to be better 1:18 A P/E ratio of 20 or lower is what a typical value investor seeks 1:23 In 2014, at the time of this video, the S&P 500's P/E ratio was 15.33 1:33 PEG = P/E divided by growth-rate 1:40 1.0 or less is a good/undervalued PEG 1:47 1.0 or above means overvalued PEG 2:08 PEG for S&P 500 (at time of video) is 1.93
Remember that if you're looking at forward P/E, you're already accounting for next year's earnings. By using the 1-year PEG screen you're just asking for the group of companies that has the biggest hill to climb to get to the P/E you want. In other words, earnings might have to grow 20%+ just to get to a 20 P/E. Perversely, by using these metrics together, you're turning up speculative stocks instead of cheap stocks. That stock fails to be cheap if the 20% growth doesn't materialize! I'd be very, very wary of the company with a 300% growth rate.
0:47 P/E = price-to-earnings (price divided by earnings)
1:06 In general, a lower P/E ratio is considered to be better
1:18 A P/E ratio of 20 or lower is what a typical value investor seeks
1:23 In 2014, at the time of this video, the S&P 500's P/E ratio was 15.33
1:33 PEG = P/E divided by growth-rate
1:40 1.0 or less is a good/undervalued PEG
1:47 1.0 or above means overvalued PEG
2:08 PEG for S&P 500 (at time of video) is 1.93
i'm new studying this stuff u explain it the best
Remember that if you're looking at forward P/E, you're already accounting for next year's earnings. By using the 1-year PEG screen you're just asking for the group of companies that has the biggest hill to climb to get to the P/E you want. In other words, earnings might have to grow 20%+ just to get to a 20 P/E. Perversely, by using these metrics together, you're turning up speculative stocks instead of cheap stocks. That stock fails to be cheap if the 20% growth doesn't materialize! I'd be very, very wary of the company with a 300% growth rate.
Kevin matras, the best.
what if peg ratio is negative ,but findamentally a strong stock ?
and now in 2019 all the companies you mentioned are down by more than 30%
check again in 2021
Pe growth ratio is more accurate indicator of stock compare with pe ratio.
Nice
4 years later, from those 5, only RCL did good. Hindsight is 20/20 but still....
Evaluate the statement you said carefully, really...there in lies the secret to the stock market, its very simple but we make it oh so complicated
Great
good explanation. thank you.
Thanks for watching!
Distracting tools in the background 👎