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The PE ratio is a valuation metric that compares a company's price-earnings ratio with its projected growth rate. Small, high-growth stocks generally trade at higher PE's compared to the Large-caps. If the PE ratio is around 1, the company is considered fairly valued. A PE ratio that is much higher than 1 indicates an overvalued company, and a PE below 1 indicates an undervalued company. While the PE ratio can effectively provide insight in certain evaluations, it is limited by its overriding focus on earnings growth. Revenue growth, cash flow, dividends, debt, and numerous other factors are also critical in determining value. Additionally, while PE is useful for smaller companies it may be misleading for big-caps, since sustained growth is less important to their total returns. PE is most useful when supplementing a thorough discounted cash flow analysis or relative valuation.
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What is considered a good P/E ratio for a company?
A good P/E ratio for a company is typically considered to be between 15 and 25. This ratio helps investors assess the company's stock price relative to its earnings per share. A lower P/E ratio may indicate that the stock is undervalued, while a higher ratio may suggest it is overvalued.
Where can you find historical p e ratios for stocks?
ycharts.com
Is a negative P/E ratio considered favorable in investing?
No, a negative P/E ratio is generally not considered favorable in investing. It indicates that a company's earnings are negative, which may suggest financial instability or poor performance. Investors typically look for positive P/E ratios as a sign of profitability and potential growth.
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How can one find the P/E ratio of a company?
To find the P/E ratio of a company, divide the current stock price by the company's earnings per share. This ratio helps investors assess the company's valuation and growth potential.
Is a high P E ratio better than a low P E ratio?
No. A higher P E ratio can result in much better results than a lower P E ratio, but it is a lot riskier. Meaning a higher risk of loss for the higher P E ratio.
What has the author Charles P Jones written?
Charles P. Jones has written: 'Investments' -- subject(s): Investment analysis, Investments
What has the author P P E Weaver written?
P. P. E. Weaver has written: 'Ostracoda from the British Lower Chalk and Plenus Marls' -- subject(s): Fossil Myodocopida, Fossil Podocopida, Paleontology
Which are the closed lower case letters?
a, b. d. e, g, o, p and q.a, b. d. e, g, o, p and q.a, b. d. e, g, o, p and q.a, b. d. e, g, o, p and q.
What has the author M P Kacker written?
M. P. Kacker has written: 'Transatlantic trends in retailing' -- subject(s): American Investments, Foreign Investments, Foreign ownership, Franchises (Retail trade), Investments, American, Investments, Foreign, Retail trade
What has the author Ronald P M Giammarino written?
Ronald P. M. Giammarino has written: 'Capital investment challenges in Canada' -- subject(s): Capital investments, Investments
What has the author Joseph P Quinlan written?
Joseph P. Quinlan has written: 'Vietnam' -- subject(s): Commerce, Country risk, Economic conditions, Foreign Investments, Investments, Foreign
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What has the author E P Cox written?
E. P. Cox has written: 'Evaluation of the corrosion resistance of alternate revetment wire fabric materials in the lower Mississippi River' -- subject(s): Corrosion, Wire netting
What is an acceptable price earnings ratio?
An price to earnings (P/E) ratio shows the number of years to cover the initial capital spent in an equity investment. There is no real acceptable, and therefore unnacceptable P/E ratio, and depends on each investors personal expectations or goals. Except that generally a higher P/E ratio is better than a lower P/E ratio, for obvious reasons.
The odds in favor of an event are 10 to1 ratio Find the probability that the event will occur?
If the odd favoring an event are 10 to 1, then the probability of the event occurring is 0.9. The odds in favor of an event are 10:1. Find the probability that the event will occur. ---- P(E)+P(E') = 1 --- P(E)/P(E') = 10/1 So P(E) = 10P(E') ---- Substitute for P(E) and solve for P(E'): 10P(E')+P(E') = 1 11P(E') = 1 P(E') = 1/11 --- Therefore P(E) = 10/11
N E P?
What is N E P?
