netwrangler said: ↑
Hi Primer,
Some thoughts on PE ratios:
...[see above for full quote...]
That's just a start. I'm sure others can add to this. In the meantime I'll try to find some references that will help you gain a deeper understanding of this key stock ratio.
My first thoughts, staying on the PE as per your question.
Albert0373 said: ↑
I only look at the PE if I'm adding a stock to my long term portfolio, you really have no need for it otherwise. Take for example...FSLR
Trading with a PE of 179.66, yet broke out nicely from its inverted head and shoulders pattern on the charts and spurted up 50% in two months.
It had a high PE already, back when it was $30. Up 413% since I first started trading it (I've been in and out so I didn't get that much :) )
See, "relatively high multiples do not necessarily mean their stocks are over priced and not good buys for the long term." A P/E ratio uses past earnings so it'll give a less accurate reflection of the growth potentials. The PEG ratio is better to use in determining growth:
More on the PEG, and why it's better than using the PE to compare growth:
http://www.investopedia.com/articles/00/092200.asp
Great article on Investopedia to help you:
"Is a stock with a lower P/E always a better investment than a stock with a higher one?"
http://www.investopedia.com/ask/answ...nvestments.asp
Click to expand...
Excellent addition from Albert on PEG. I use PEG often, but Albert explains it much better than I could have. Gives link references too.
BuyOnDips said: ↑
They have a nice balance sheet. They have a nice looking chart. They just reported this morning and easily beat estimates and raised guidance. It looks like a winner to me.
http://finance.yahoo.com/q?s=CBI
http://www.marketwatch.com/News/Sto...4968-B222-FEF8D77D314A}&siteid=yhoo&dist=yhoo
Here's an opportunity to apply some of this PE and PEG knowledge in an analysis.
The fun part of this forum is putting the pieces together and coming up with something useful. :)
BTW: I'll reply to BuyOnDips' post in that thread.
Assume you know you can jump to there by clicking the little blue arrow at the end of the first line of BuyOnDips' quote.