• What is the P/E Ratio? The Wealth Academy presented by Valentine Ventures

    The Price-to-Earnings ratio (P/E Ratio) is a way to measure value in stocks. The Wealth Academy (http://www.wealthacademy.org) is an ever-growing library of brief, educational videos about investing, personal finance, and the pinnacle of wealth attainment: living a life rich in the things money can't buy. The Wealth Academy traces its roots to a syndicated radio show I produced for many years that ended in 2010 ("The Rich Life with Bill Valentine"). The show was based on the idea that rather than "stock tips", investors needed to better understand the fundamentals of investing, what types of information they could trust and not trust, and just how much outdated information there is out there. The Wealth Academy picks up where the radio show left off. The videos are produced at my inve...

    published: 16 Mar 2012
  • Introduction to the price-to-earnings ratio | Finance & Capital Markets | Khan Academy

    Price to Earnings Ratio (or P/E ratio). Created by Sal Khan. Watch the next lesson: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/valuation-and-investing/v/p-e-discussion?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/valuation-and-investing/v/earnings-and-eps?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Finance and capital markets on Khan Academy: Life is full of people who will try to convince you that something is a good or bad idea by spouting technical jargon. Most of them have no idea what they are talking about. Don't be one of those people or their victims when it comes to ...

    published: 19 Aug 2009
  • A beginner's guide to p/e ratios - MoneyWeek Investment Tutorials

    The p/e ratio is the main measure analysts use to determine a company's position relative to the rest of the market. Don't miss out on Tim Bennett's video tutorials -- get the latest video sent straight to your inbox each week, before it's released on YouTube: http://bit.ly/TimBSubscribe To receive Tim's 50 FREE MoneyWeek Basics emails: http://bit.ly/mwk-basics Watch over 100 of Tim's videos for free: http://MoneyWeek.com/tutorials Or download them to your mobile device: http://bit.ly/TimBpodcast For the most important financial stories and how to profit from them: http://MoneyWeek.com http://Facebook.com/pages/MoneyWeek/110326662354766 http://Twitter.com/moneyweek Video series by CFA UK Highly Commended journalist Tim Bennett. http://twitter.com/TimMoneyweek

    published: 24 Sep 2010
  • What is P/E Ratio | by Wall Street Survivor

    What is a P/E Ratio? P/E, or price-to-earnings ratio, is probably the most popular analytical tool provided in the stock quote. At a glimpse, it lets you know how the market values a company in relation to its earnings. A higher P/E ratio tends to mean that a company’s stock price is relatively expensive. A lower P/E ratio means the price is relatively inexpensive. The key word here is relatively. P/E ratio is useless on its own; it always needs to be compared, either to other companies of similar size, the company's industry, or to past performances of the same company. What you really need to know about this is that low P/E ratios suggest the stock may be under-valued, but also may have no growth prospects. Always compare a company’s P/E ratio with companies in the same industry and ...

    published: 04 May 2012
  • Value Investing Rules: How To Use The PE Ratio To Pick Stocks

    This is a free preview from from my Value Investing Course: https://www.udemy.com/value-investing-rules The full course contains 10 rules for value investing and includes over 2 hours of HD video content, 40 lectures and support. Each rule makes up a sophisticated investing strategy that is tested on historical stock market data. Rule 3 of the strategy concerns the PE ratio. Learn how to use the price-earnings ratio to select deep value stocks and gain the most from your investments. Trading stocks is difficult but this course on value investing makes it simple. Read my blog here: http://jbmarwood.com

    published: 08 Oct 2015
  • What is a PE Ratio?

    When deciding between two stocks in the same industry, the price-earnings ratio, or the P/E ratio, is one way to help you decide. Watch this video provided by E*TRADE to find out how to calculate price-earnings ratio and make more informed investment decisions. Like and share.

    published: 19 Nov 2012
  • Price to Earnings Ratio

    Presenter: Nikhil The Price to Earnings Ratio, also known as the P/E Ratio, is an important metric that investors look at before investing in a company. You will find answers of the following in this video: - Why Low p/e ratios are better than high p/e ratios - what is the formula for eps or earnings per share - what is shares outstanding - example of pe ratio and comparison Ending beat by Lynval D'tchalis, check him out here: https://soundcloud.com/lynval-sundayswag-dtchalis If you want to know more about us and the progress of our videos, make sure to follow us on Twitter @MrNikkyG and @MrSoniBros

    published: 25 Jun 2013
  • 3 p/e ratio beartraps to avoid - MoneyWeek Investment Tutorials

    Like this MoneyWeek Video? Want to find out more on ratios? Go to: http://www.moneyweekvideos.com/3-pe-ratio-beartraps-to-avoid/ now and you'll get free bonus material on this topic, plus a whole host of other videos. Search our whole archive of useful MoneyWeek Videos, including: · The six numbers every investor should know... http://www.moneyweekvideos.com/six-numbers-every-investor-should-know/ · What is GDP? http://www.moneyweekvideos.com/what-is-gdp/ · Why does Starbucks pay so little tax? http://www.moneyweekvideos.com/why-does-starbucks-pay-so-little-tax/ · How capital gains tax works... http://www.moneyweekvideos.com/how-capital-gains-tax-works/ · What is money laundering? http://www.moneyweekvideos.com/what-is-money-laundering/

    published: 22 Feb 2013
  • Investopedia Video: Earnings Per Share Explained (EPS)

    Be the first to check out our latest videos on Investopedia Video: http://www.investopedia.com/video/ Earnings per share is one of the most carefully followed metrics in investing. We show you why this ratio matters and how to calculate it. For more on Earnings Per Share (EPS), and how it can help your trading success -- check out; The 5 Types Of Earnings Per Share http://www.investopedia.com/articles/analyst/091901.asp CFA Level 1 Exam Prep: Determining The EPS Of A Company http://www.investopedia.com/exam-guide/cfa-level-1/equity-investments/determining-eps-earnings-per-share.asp How To Evaluate The Quality Of EPS http://www.investopedia.com/articles/analyst/03/091703.asp Assess Shareholder Wealth With EPS http://www.investopedia.com/articles/basics/07/eps.asp

    published: 22 Oct 2010
  • 4 (PE). Finding Basic Stock Terms

    Download Preston's 1 page checklist for finding great stock picks: http://buffettsbooks.com/checklist Preston Pysh is the #1 selling Amazon author of two books on Warren Buffett. The books can be found at the following location: http://www.amazon.com/gp/product/0982967624/ref=as_li_tl?ie=UTF8&camp=1789&creative=9325&creativeASIN=0982967624&linkCode=as2&tag=pypull-20&linkId=EOHYVY7DPUCW3WD4 http://www.amazon.com/gp/product/1939370159/ref=as_li_tl?ie=UTF8&camp=1789&creative=9325&creativeASIN=1939370159&linkCode=as2&tag=pypull-20&linkId=XRE5CA2QJ3I2OWSW This video is a practical exercise that shows students of the BuffettsBooks.com website how to find the terms they've been learning about in the first 4 lessons of Course 1, Unit 1.

    published: 21 Apr 2012
  • What is Price-Earnings Ratio?

    A Price-Earnings Ratio is just the price of the company in the market per share, divided by it's earnings for the year. In this video, I explain what Price-Earnings Ratios are, and why they are critical for you to understand when evaluating a company. To sign-up for my Transformational Investing Webinar, visit: http://bit.ly/1oJYulM Do you know the 4 Ms of Successful Investing? Learn more: http://bit.ly/1YjLaAx Don't forget to subscribe to my channel here: http://ow.ly/RNAnK _____________ For more great Rule #1 content and training: Podcast: http://bit.ly/22iJsR0 Blog: http://bit.ly/1Ph82yQ Facebook: https://www.facebook.com/rule1investing Twitter: https://twitter.com/Rule1_Investing Google+: +PhilTownRule1Investing Pinterest: https://www.pinterest.com/rule1investing

    published: 14 Apr 2016
  • P/E Price Earnings Ratio Analysis in 10 minutes: Financial Ratio Analysis Tutorial

    Clicked here http://www.MBAbullshit.com/ and OMG wow! I'm SHOCKED how easy.. No wonder others goin crazy sharing this??? Share it with your other friends too! Fun MBAbullshit.com is filled with easy quick video tutorial reviews on topics for MBA, BBA, and business college students on lots of topics from Finance or Financial Management, Quantitative Analysis, Managerial Economics, Strategic Management, Accounting, and many others. Cut through the bullshit to understand MBA!(Coming soon!) P/E Price Earnings Ratio in 10 minutes: Financial Ratio Analysis Tutorial http://www.youtube.com/watch?v=Zu-D8oWJ5uU

    published: 15 May 2011
  • What is PE Ratio? | All about Price Earnings P/E Ratio | Finance & Capital Markets Tips by Yadnya

    PE ratio is one of the most widely used tools for stock selection. It is calculated by dividing the current market price of the stock by its earning per share (EPS). It shows the sum of money you are ready to pay for each rupee worth of the earnings of the company. Find us on Social Media and stay connected: Facebook Page - https://www.facebook.com/InvestYadnya Facebook Group - https://goo.gl/y57Qcr Twitter - https://www.twitter.com/InvestYadnya

    published: 18 Jan 2017
  • What Every Stock Investor Must Know About PE Ratio

    Why PE or price earnings ratio is such an important indicator of a stock for a stock market investor? What is it and how to decode it. Website: www.fundoomoney.com Share video: https://youtu.be/4RUByeU2X2U Edited transcripts UDAYAN RAY In this particular segment we will be talking about trying to demystify one of the terms that is used very, very often. That’s the PE. PE is price earnings ratio. Now what is this all about and why do people keep talking about it? We will try to decode it in very, very simple terms for you. That’s coming up shortly. Now PE or price earnings ratio is something that people in any stock market discussion or any discussion about stocks. What is this term all about and why does it hold any kind of importance for an investor whether it’s a prospective investor or...

    published: 11 Dec 2016
What is the P/E Ratio?  The Wealth Academy presented by Valentine Ventures

What is the P/E Ratio? The Wealth Academy presented by Valentine Ventures

  • Order:
  • Duration: 4:39
  • Updated: 16 Mar 2012
  • views: 69895
videos
The Price-to-Earnings ratio (P/E Ratio) is a way to measure value in stocks. The Wealth Academy (http://www.wealthacademy.org) is an ever-growing library of brief, educational videos about investing, personal finance, and the pinnacle of wealth attainment: living a life rich in the things money can't buy. The Wealth Academy traces its roots to a syndicated radio show I produced for many years that ended in 2010 ("The Rich Life with Bill Valentine"). The show was based on the idea that rather than "stock tips", investors needed to better understand the fundamentals of investing, what types of information they could trust and not trust, and just how much outdated information there is out there. The Wealth Academy picks up where the radio show left off. The videos are produced at my investment firm, Valentine Ventures, by me and my team. We do not ask anything from you in order to watch these videos, except perhaps your feedback—if we can do new video for you, or do the ones we do better. If you want to be kept apprised of the videos being added to the Academy (along with our other informative content), be sure and sign up for our "Weekly Update" via the above link. Thank you and we hope you like what we've done.
https://wn.com/What_Is_The_P_E_Ratio_The_Wealth_Academy_Presented_By_Valentine_Ventures
Introduction to the price-to-earnings ratio | Finance & Capital Markets | Khan Academy

Introduction to the price-to-earnings ratio | Finance & Capital Markets | Khan Academy

  • Order:
  • Duration: 14:47
  • Updated: 19 Aug 2009
  • views: 248369
videos
Price to Earnings Ratio (or P/E ratio). Created by Sal Khan. Watch the next lesson: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/valuation-and-investing/v/p-e-discussion?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/valuation-and-investing/v/earnings-and-eps?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Finance and capital markets on Khan Academy: Life is full of people who will try to convince you that something is a good or bad idea by spouting technical jargon. Most of them have no idea what they are talking about. Don't be one of those people or their victims when it comes to stocks. From P/E rations to EV/EBITDA, we've got your back! About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content. For free. For everyone. Forever. #YouCanLearnAnything Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1 Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy
https://wn.com/Introduction_To_The_Price_To_Earnings_Ratio_|_Finance_Capital_Markets_|_Khan_Academy
A beginner's guide to p/e ratios - MoneyWeek Investment Tutorials

A beginner's guide to p/e ratios - MoneyWeek Investment Tutorials

  • Order:
  • Duration: 9:41
  • Updated: 24 Sep 2010
  • views: 133523
videos
The p/e ratio is the main measure analysts use to determine a company's position relative to the rest of the market. Don't miss out on Tim Bennett's video tutorials -- get the latest video sent straight to your inbox each week, before it's released on YouTube: http://bit.ly/TimBSubscribe To receive Tim's 50 FREE MoneyWeek Basics emails: http://bit.ly/mwk-basics Watch over 100 of Tim's videos for free: http://MoneyWeek.com/tutorials Or download them to your mobile device: http://bit.ly/TimBpodcast For the most important financial stories and how to profit from them: http://MoneyWeek.com http://Facebook.com/pages/MoneyWeek/110326662354766 http://Twitter.com/moneyweek Video series by CFA UK Highly Commended journalist Tim Bennett. http://twitter.com/TimMoneyweek
https://wn.com/A_Beginner's_Guide_To_P_E_Ratios_Moneyweek_Investment_Tutorials
What is P/E Ratio | by Wall Street Survivor

What is P/E Ratio | by Wall Street Survivor

  • Order:
  • Duration: 1:36
  • Updated: 04 May 2012
  • views: 83717
videos
What is a P/E Ratio? P/E, or price-to-earnings ratio, is probably the most popular analytical tool provided in the stock quote. At a glimpse, it lets you know how the market values a company in relation to its earnings. A higher P/E ratio tends to mean that a company’s stock price is relatively expensive. A lower P/E ratio means the price is relatively inexpensive. The key word here is relatively. P/E ratio is useless on its own; it always needs to be compared, either to other companies of similar size, the company's industry, or to past performances of the same company. What you really need to know about this is that low P/E ratios suggest the stock may be under-valued, but also may have no growth prospects. Always compare a company’s P/E ratio with companies in the same industry and of the same size – A higher P/E ratio compared to the industry suggests either that the stock is overvalued or people expect bigger things from this particular company than all the others in that industry. Learn more about the P/E ratio with Wall Street Survivor's Getting Started In The Stock Market course pack:http://courses.wallstreetsurvivor.com/is/10-getting-started-in-the-stock-market/
https://wn.com/What_Is_P_E_Ratio_|_By_Wall_Street_Survivor
Value Investing Rules: How To Use The PE Ratio To Pick Stocks

Value Investing Rules: How To Use The PE Ratio To Pick Stocks

  • Order:
  • Duration: 3:54
  • Updated: 08 Oct 2015
  • views: 33440
videos
This is a free preview from from my Value Investing Course: https://www.udemy.com/value-investing-rules The full course contains 10 rules for value investing and includes over 2 hours of HD video content, 40 lectures and support. Each rule makes up a sophisticated investing strategy that is tested on historical stock market data. Rule 3 of the strategy concerns the PE ratio. Learn how to use the price-earnings ratio to select deep value stocks and gain the most from your investments. Trading stocks is difficult but this course on value investing makes it simple. Read my blog here: http://jbmarwood.com
https://wn.com/Value_Investing_Rules_How_To_Use_The_Pe_Ratio_To_Pick_Stocks
What is a PE Ratio?

What is a PE Ratio?

  • Order:
  • Duration: 1:31
  • Updated: 19 Nov 2012
  • views: 18671
videos
When deciding between two stocks in the same industry, the price-earnings ratio, or the P/E ratio, is one way to help you decide. Watch this video provided by E*TRADE to find out how to calculate price-earnings ratio and make more informed investment decisions. Like and share.
https://wn.com/What_Is_A_Pe_Ratio
Price to Earnings Ratio

Price to Earnings Ratio

  • Order:
  • Duration: 3:31
  • Updated: 25 Jun 2013
  • views: 44749
videos
Presenter: Nikhil The Price to Earnings Ratio, also known as the P/E Ratio, is an important metric that investors look at before investing in a company. You will find answers of the following in this video: - Why Low p/e ratios are better than high p/e ratios - what is the formula for eps or earnings per share - what is shares outstanding - example of pe ratio and comparison Ending beat by Lynval D'tchalis, check him out here: https://soundcloud.com/lynval-sundayswag-dtchalis If you want to know more about us and the progress of our videos, make sure to follow us on Twitter @MrNikkyG and @MrSoniBros
https://wn.com/Price_To_Earnings_Ratio
3 p/e ratio beartraps to avoid - MoneyWeek Investment Tutorials

3 p/e ratio beartraps to avoid - MoneyWeek Investment Tutorials

  • Order:
  • Duration: 7:19
  • Updated: 22 Feb 2013
  • views: 8306
videos
Like this MoneyWeek Video? Want to find out more on ratios? Go to: http://www.moneyweekvideos.com/3-pe-ratio-beartraps-to-avoid/ now and you'll get free bonus material on this topic, plus a whole host of other videos. Search our whole archive of useful MoneyWeek Videos, including: · The six numbers every investor should know... http://www.moneyweekvideos.com/six-numbers-every-investor-should-know/ · What is GDP? http://www.moneyweekvideos.com/what-is-gdp/ · Why does Starbucks pay so little tax? http://www.moneyweekvideos.com/why-does-starbucks-pay-so-little-tax/ · How capital gains tax works... http://www.moneyweekvideos.com/how-capital-gains-tax-works/ · What is money laundering? http://www.moneyweekvideos.com/what-is-money-laundering/
https://wn.com/3_P_E_Ratio_Beartraps_To_Avoid_Moneyweek_Investment_Tutorials
Investopedia Video: Earnings Per Share Explained (EPS)

Investopedia Video: Earnings Per Share Explained (EPS)

  • Order:
  • Duration: 1:11
  • Updated: 22 Oct 2010
  • views: 98642
videos
Be the first to check out our latest videos on Investopedia Video: http://www.investopedia.com/video/ Earnings per share is one of the most carefully followed metrics in investing. We show you why this ratio matters and how to calculate it. For more on Earnings Per Share (EPS), and how it can help your trading success -- check out; The 5 Types Of Earnings Per Share http://www.investopedia.com/articles/analyst/091901.asp CFA Level 1 Exam Prep: Determining The EPS Of A Company http://www.investopedia.com/exam-guide/cfa-level-1/equity-investments/determining-eps-earnings-per-share.asp How To Evaluate The Quality Of EPS http://www.investopedia.com/articles/analyst/03/091703.asp Assess Shareholder Wealth With EPS http://www.investopedia.com/articles/basics/07/eps.asp
https://wn.com/Investopedia_Video_Earnings_Per_Share_Explained_(Eps)
4 (PE). Finding Basic Stock Terms

4 (PE). Finding Basic Stock Terms

  • Order:
  • Duration: 11:01
  • Updated: 21 Apr 2012
  • views: 141146
videos
Download Preston's 1 page checklist for finding great stock picks: http://buffettsbooks.com/checklist Preston Pysh is the #1 selling Amazon author of two books on Warren Buffett. The books can be found at the following location: http://www.amazon.com/gp/product/0982967624/ref=as_li_tl?ie=UTF8&camp=1789&creative=9325&creativeASIN=0982967624&linkCode=as2&tag=pypull-20&linkId=EOHYVY7DPUCW3WD4 http://www.amazon.com/gp/product/1939370159/ref=as_li_tl?ie=UTF8&camp=1789&creative=9325&creativeASIN=1939370159&linkCode=as2&tag=pypull-20&linkId=XRE5CA2QJ3I2OWSW This video is a practical exercise that shows students of the BuffettsBooks.com website how to find the terms they've been learning about in the first 4 lessons of Course 1, Unit 1.
https://wn.com/4_(Pe)._Finding_Basic_Stock_Terms
What is Price-Earnings Ratio?

What is Price-Earnings Ratio?

  • Order:
  • Duration: 2:21
  • Updated: 14 Apr 2016
  • views: 2467
videos
A Price-Earnings Ratio is just the price of the company in the market per share, divided by it's earnings for the year. In this video, I explain what Price-Earnings Ratios are, and why they are critical for you to understand when evaluating a company. To sign-up for my Transformational Investing Webinar, visit: http://bit.ly/1oJYulM Do you know the 4 Ms of Successful Investing? Learn more: http://bit.ly/1YjLaAx Don't forget to subscribe to my channel here: http://ow.ly/RNAnK _____________ For more great Rule #1 content and training: Podcast: http://bit.ly/22iJsR0 Blog: http://bit.ly/1Ph82yQ Facebook: https://www.facebook.com/rule1investing Twitter: https://twitter.com/Rule1_Investing Google+: +PhilTownRule1Investing Pinterest: https://www.pinterest.com/rule1investing
https://wn.com/What_Is_Price_Earnings_Ratio
P/E Price Earnings Ratio Analysis in 10 minutes: Financial Ratio Analysis Tutorial

P/E Price Earnings Ratio Analysis in 10 minutes: Financial Ratio Analysis Tutorial

  • Order:
  • Duration: 9:57
  • Updated: 15 May 2011
  • views: 47919
videos
Clicked here http://www.MBAbullshit.com/ and OMG wow! I'm SHOCKED how easy.. No wonder others goin crazy sharing this??? Share it with your other friends too! Fun MBAbullshit.com is filled with easy quick video tutorial reviews on topics for MBA, BBA, and business college students on lots of topics from Finance or Financial Management, Quantitative Analysis, Managerial Economics, Strategic Management, Accounting, and many others. Cut through the bullshit to understand MBA!(Coming soon!) P/E Price Earnings Ratio in 10 minutes: Financial Ratio Analysis Tutorial http://www.youtube.com/watch?v=Zu-D8oWJ5uU
https://wn.com/P_E_Price_Earnings_Ratio_Analysis_In_10_Minutes_Financial_Ratio_Analysis_Tutorial
What is PE Ratio? | All about Price Earnings P/E Ratio | Finance & Capital Markets Tips by Yadnya

What is PE Ratio? | All about Price Earnings P/E Ratio | Finance & Capital Markets Tips by Yadnya

  • Order:
  • Duration: 4:19
  • Updated: 18 Jan 2017
  • views: 4187
videos
PE ratio is one of the most widely used tools for stock selection. It is calculated by dividing the current market price of the stock by its earning per share (EPS). It shows the sum of money you are ready to pay for each rupee worth of the earnings of the company. Find us on Social Media and stay connected: Facebook Page - https://www.facebook.com/InvestYadnya Facebook Group - https://goo.gl/y57Qcr Twitter - https://www.twitter.com/InvestYadnya
https://wn.com/What_Is_Pe_Ratio_|_All_About_Price_Earnings_P_E_Ratio_|_Finance_Capital_Markets_Tips_By_Yadnya
What Every Stock Investor Must Know About PE Ratio

What Every Stock Investor Must Know About PE Ratio

  • Order:
  • Duration: 7:23
  • Updated: 11 Dec 2016
  • views: 903
videos
Why PE or price earnings ratio is such an important indicator of a stock for a stock market investor? What is it and how to decode it. Website: www.fundoomoney.com Share video: https://youtu.be/4RUByeU2X2U Edited transcripts UDAYAN RAY In this particular segment we will be talking about trying to demystify one of the terms that is used very, very often. That’s the PE. PE is price earnings ratio. Now what is this all about and why do people keep talking about it? We will try to decode it in very, very simple terms for you. That’s coming up shortly. Now PE or price earnings ratio is something that people in any stock market discussion or any discussion about stocks. What is this term all about and why does it hold any kind of importance for an investor whether it’s a prospective investor or an existing investor? To help us understand this and decode this term, we have with us stock market expert Mohit Satyanand. Hi Mohit! MOHIT SATYANAND Hi Udayan! UDAYAN RAY Mohit PE ratio is an oft used term. For a lay investor, can you explain it in simple terms? Why should an investor be worried about it? MOHIT SATYANAND I wouldn’t say worried, but I think it’s the most important single metric of relating to a stock. So first earnings: Earnings is a reason I own a stock, and price is how much I am willing to pay for that. So let’s take two hypothetical companies which are identical in all respects. They are both growing at the same rate. And they both have earnings of Rs 1 per share each. But the share of one company is priced at Rs 10 and the other at Rs 50. Which would I buy? Obviously, I would buy the share which is available at Rs 10. Meaning it has a PE ratio of 10:1. For a Rs 1 earning, I am paying a price of Rs 10. That’s a PE of 10. But the other one for the same earnings, the same prospect of earnings growth, I am paying Rs 50. It’s much more expensive. So this PE ratio is actually compressing a whole lot of information about a stock into this one number. What is it making today and what am I paying for that earnings? Of course you don’t buy a stock for what it’s earning today. You buy it for what you expect it to earn. But in the absence of other data, what it’s earning today, last quarter or last 12 quarters, or last 4 quarters, the last running year, becomes a sort of a surrogate or a short hand for what I expect the company to earn. And therefore this PE Ratio is the single most important ratio. And we use it not just to look at a company but we use it to look at an entire stock market. So for example people say today that the PE ratio for the Nifty is close to its all time high, and therefore we should be careful about investing in the Nifty. And I think this is probably a good place to insert one more thought which is that if I had two companies, both of which were available for the same PE, let’s say 10, but one company has been growing at 10% per annum, and another company has been growing at 40% per annum. Which would I rather buy? Obviously I would much rather buy the shares of the company which is growing more and more rapidly. Because, then over a period of time, one company will have earnings only grown by 50% over a 4 year period; the other would have more than doubled. And therefore at that point in time the PE ratios of the two will be very, very different. And this is where you bring in another allied concept of PE growth. UDAYAN RAY PEG Ratio. MOHIT SATYANAND PEG Ratio. So I don’t want to get into that. I am making a simple point that (a) the PE ratio is extremely important (b) the growth (of PE) is very important. UDAYAN RAY Mohit a lot of people talk about forward PE ratio, this and that. That is basically to figure out what you are earning today how it will pan out tomorrow. MOHIT SATYANAND Right UDAYAN RAY Is there any smart and accurate way of doing that or it’s a subjective thing? Anybody can do anything they want. MOHIT SATYANAND There is no accurate way and there is no fail safe way, because nobody has seen tomorrow. But it’s more about feel. Is this sector growing? So, is the purchase of cars growing in our country or not? Is it growing at 5% per annum or 10% per annum or 20% per annum? Within the car market is Maruti doing well or Hyundai is doing well or Ford is doing well? I think these are good and very useful ways of looking at a company. And that is what analysts do. Useful Links Facebook: https://www.facebook.com/fundoomoney/ Pinterest: https://in.pinterest.com/fundoomoney/ Twitter: https://twitter.com/FundooMoney Google+ : https://plus.google.com/u/0/+FundooMoneyWorld Sound Cloud: soundcloud.com/fundoomoney Slideshare: www.slideshare.net/FundooMoneyWorld LinkedIn: https://www.linkedin.com/company/fundoomoney
https://wn.com/What_Every_Stock_Investor_Must_Know_About_Pe_Ratio
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