Questions tagged [price-earnings-ratio]

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70 views

Why isn't the P/E method disturbed if revenues are over-estimated?

Gill, Madura. Personal Finance, 4th Canadian Edition 2019. p 349. Which of the following is not a limitation of the P/E method? a. Forecasting earnings is difficult. b. It is ...
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105 views

What is the correlation (if any) between earnings report and stock price movement?

This might sound like a dumb question (I'm relatively new to the stock market). I know this doesn't happen, but why doesn't the stock price directly move in accordance to the earnings reported vs what ...
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4answers
203 views

For a very stable listed company, does the P/E ratio represent how many years the buyer can stand to earn his/her investment back?

I'm looking into a public company that is a very stable one (revenue keeps the same for every year), for example, C (citybank). I find its P/E ratio is about 9.0. That means if I invest $100 into the ...
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2answers
488 views

Discrepancy in P/E ratio of stocks in Robinhood app?

The current price of the Amazon stock is $1673. The latest EPS ratio was $6.04 for Q4 2018. So, the P/E ratio should be $1673/$6.04 ~ 279. But the robinhood app says the P/E ratio of Amazon is 83. ...
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P/E & P/B of stocks purchased by Warren Buffett

I am looking for data about Warren Buffett's famous purchases. For e.g. when Warren Buffett purchased stock of Coke, American Express, Moody's & other of his long term purchases what was the P/...
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Understanding corporate earnings manipulation

While reading earnings manipulation on investopedia, I came across following sentences: Another form of manipulation is to change company policy so more costs are capitalized rather than expensed ...
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1answer
104 views

Studying for basic finance exam and stuck finding the stock value

I'm not sure if this is the right place to ask a school related question but any help would be much appreciated! Note that this is not an actual graded assignment but I am studying for an exam with ...
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3answers
188 views

Why do PEG ratio values calculated on different financial web sites differ from each other?

For example when I calculate the PEG of Microsoft (for the fiscal year 2017): For P/E ratio: P/E Ratio = Price per Share (last price before 10-k filing) / EPS (diluted) = 68.93 / 2.71 ...
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2answers
56 views

Trailing or forward earnings to calculate SP500?

If I have current earnings for the SP500 of $160, should trailing or forward P/E be used to calculate the SP500's price? What is the difference in using one over the other?
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How to calculate stock price with EPS and outstanding shares

How do you calculate stock price with only EPS and outstanding shares, and market cap available? EDIT sorry forgot to mention, i was trying to get future stock price based on financial guidance of ...
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1answer
331 views

Is the PE Ratio a good indicator of when to move money in and out of the stock market

I've read much about investing, how nothing is predictable and how even the best financial manger probably wont due much better than an indexed fund. I remember reading this article that described a ...
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2answers
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P/E (or similar) for index funds?

I'm looking to compare index funds, such as VTIVX vs VGTSX vs VFIAX, etc. I've found these posts that address P/E ratios for the S&P 500: API for retrieving index P/E ratio? Where can I find S&...
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Why was S&P 500 PE Ratio so high on May 2009

When I looked at S&P 500 PE Ratio chart today, I am surprised that the PE ratio was so high on May 2009, which was 123.73, and it decreased dramatically afterwards. I have no idea why this ...
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1k views

Does the P/E ratio of REITs matter for dividend investing?

When buying REITs, one essentially looks for the dividend yield (last dividend vs. current share price). If it's an established fund, does it really matter what's the P/E ratio if one capitalizes on ...
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Price Earnings Ratio

OK so struggling to get my head around why a high price earnings ratio is preferable to a low P.E. . If there is a big gap between a company's share price and its earnings per share surely that would ...
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3answers
211 views

The Intelligent Investor: Northern Pacific Railway example

I am reading the revised edition of Ben Graham's THE INTELLIGENT INVESTOR (First Collins Business Essentials Edition, 2006) with commentaries by Jason Zweig. In chapter 7, "Portfolio Policy for the ...
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1answer
625 views

Is Peter Lynch talking about the Dividend Adjusted PEG Ratio in this quote?

In Peter Lynch's One Up on Wall Street, he gave a simple, straight-forward explanation as to his preferred metric for doing a quick and dirty valuation of a firm's investment prospect: A slightly ...
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3answers
254 views

Is dividend included in EPS

I wanted to understand whether dividend is included in EPS. For example. take PFE http://finance.yahoo.com/q?s=PFE its (anual) dividend today is 1.2, while its EPS is 1.11. Does it means that PFE ...
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2answers
109 views

What should I look for when looking for stocks that are 'on-sale'?

Considering the stock market is down these days I want to invest money in mainly Large-Cap Stocks and hold them for the long-term. I was originally looking at P/E ratios being lower than average, but ...
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1answer
20k views

Where can I find historical P/E ratios for companies? [closed]

Since the market conditions are down, I am considering on investing a little money in stocks, and holding them long-term. I would like to see which stocks are 'on sale' and am looking at the P/E ...
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1answer
146 views

What is it about company performance that causes the perceived value of its stock to rise? [duplicate]

Many stocks don't pay dividends, and it's not like a shareholder has any direct financial gain from increased company earnings. Plus, they can only benefit from earnings if the company goes bankrupt ...
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1answer
50 views

Calculate price to earning and price to sale value for given dataset

Consider this dataset - https://www.google.com/finance/historical?q=NYSE%3ABME&ei=DSIeVtGMAYrvuATEsZfACA I want to calculate Price/Earning i.e. latest PRICE/(NETINC MRT/SHARESWADIL MRT) for 11 ...
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2answers
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Can PE ratio of stocks be compared to other investments?

Stocks are often characterized by their P/E ratio. In principle, stock ownership represents part ownership of the company, but in practice shareholder are somewhat distanced from the earnings: The ...
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3answers
348 views

Does the P/E ratio not apply to bond ETFs?

I cannot seem to find them on any website, but I have seen their existence for stock ETFs. If the answer to the question entitled is 'no', then why not? I exemplify with 2 ETFs: Blackrock (Canada)'s ...
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2answers
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Where or how can I model historical market purchases [closed]

I've been doing some research into the S&P PE Ratios and the correlation to the performance of the stock market. I'm looking for a place that I can test some of my theories out. For instance, If I ...
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0answers
416 views

Total market cap in country, and average p/e per country and continent(europe)

sorry I am not sure to post this question in quant stackexchange or in here. I have posted it previously in the below link https://quant.stackexchange.com/questions/18633/total-market-cap-in-country-...
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2answers
981 views

What do Earnings Per Share tell potential shareholders?

I am new to shares and the stock market, and I was just wondering, when considering which companies to buy into, why should I consider the EPS as a factor of whether or not I should buy in?
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2k views

How to calculate P/E ratio for S&P500 sectors

I want to calculate the P/E ratio for the different sectors in the S&P500. To do this I'm dividing the sector's index price (found on their website) by the sector's earnings per share. When I do ...
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2answers
577 views

How do I find out the Earnings Per Share of a Coca Cola Co Share?

I am trying to figure out the P/E ratio, mainly. But first I need to figure out the EPS (earnings per share). I have read that to calculate price/earnings ratios you must find its earnings of last ...
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1answer
172 views

How can I understand why investors think a particular company should have a high PE ratio?

Say a particular stock has a PE ratio of 30. Given that a standard valuation is closer to 10 or 15 times earnings, a PE ratio of 30 implies that investors foresee a lot of growth. How can I ...
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1answer
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Why do P/E ratios for a particular industry tend to cluster around particular values?

The answer I've read on this topic is that a new industry with a lot of growth potential (software, biotech, etc.) tends to have the stock priced at a premium in order to reflect the growth 'potential'...
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How do you calculate the P/E ratio by industry?

I would like to know how to calculate the P/E ratio by industry. On this website, it displays the P/E ratio for the current stock, the industry and the sector: FINANCIALS DTV.O ...
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3answers
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Investing: P/E Ratio basic question

I'm just starting out in investing so I apologize if this comes across as annoyingly simple question. I've just read about PE Ratio and I came across this video from investopedia P/E Ratio Video which ...
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1answer
2k views

Why do PE ratios for small cap stocks tend to be greater than those for large cap stocks?

As a general rule, why is the PE ratio of small cap stocks greater than the PE ratio of large cap stocks? Is it just a coincidence? Or is there a reason?
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1answer
1k views

What's the connection between P/E ratio and growth?

Is there an exact formula for that if we can predict the growth accurately? For example: Using discounted cash flow analysis, the impact of earnings growth and inflation can be evaluated. Using ...
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4answers
13k views

Why does the biotechnology industry have such a high PE ratio?

I'm looking at this link, which lists P/E ratios by industry. I see that biotechnology has a P/E ratio of 145, which is very high compared to other industries. What is so special about this industry ...
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1answer
563 views

How is it possible that a stock has a P/E of 0.01?

I was looking at this stock: Berkshire Hathaway Inc. (BRK-B) (The Class B shares). How come it has such a low P/E ratio?
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1answer
668 views

How to calculate/reconcile conflicting P/E ratios?

Was reading over some old LinkedIn IPO press coverage and noticed some drastically different P/E ratios being reported. Note: I know that CBS uses the $45 IPO price and ZH uses the $83 opening price. ...
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What is the P/E ratio for a company with negative earnings?

I know that PE ratio = (share price) / (net earnings per share), so does a company with a net loss mean they have a negative 1-year trailing PE? Is this surprising/unusual? What about for a company ...
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3answers
27k views

What is the formula for determining estimated stock price when I only have an earning per share number?

I need a formula for determining estimated stock price when I have an EPS number only. For instance, the EPS number "earnings per share" is created using a known number of shares, to solve for the EPS....
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3answers
13k views

Different ways of looking at P/E Ratio vs EPS

Would it be valid to assume that a stock with a low P/E ratio and also very high EPS is, generally speaking, a better purchase than a stock with that same P/E but lower EPS? My reasoning for this is ...
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1answer
4k views

Historical P/E ratios of small-cap vs. large-cap stocks?

According to the Wall Street Journal Website, average trailing 12-month P/E ratios on the major large-cap indices are currently (late September, 2011) around 12-14, which is slightly cheap compared to ...
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1answer
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Where can you find historical PEs of US indices?

Indices tracking ETFs * DIAMONDS Trust I (ticker: DIA) tracks DJIA * SPDRs (ticker: SPY) tracks S&P 500 * NASDAQ 100 Trust (ticker: QQQQ) tracks NASDAQ 100 * iShares Russell 2000 (ticker: IWM) ...
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6k views

How to calculate PE ratios for indices such as DJIA?

I want to record Dow Jones Industrial Average's PE. Yahoo Finance gives N/A [1]: >>> import y_finance >>> print y_finance.get_price_earnings_ratio('^DJI') N/A So: How to ...
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What is the p/e ratio?

What is the p/e ratio and how do I find it for a company?