HOW TO CHOOSE STOCKS STEP-BY-STEP APPROACH 1. Systematic approach: It's crucial to have a good strategy to identify stocks that align with your investment goals and risk tolerance. Let's learn the full process. 2. Identify Companies with Strong Fundamentals: Evaluate the following metrics while selecting stocks. • Price-to-Earnings (P/E) Ratio • Return...
📍The current ratio is a financial metric used to assess a company's short-term liquidity and ability to cover its immediate obligations. It is calculated by dividing a company's current assets by its current liabilities. A higher current ratio indicates a better ability to meet short-term financial obligations. 📍The price-to-earnings ratio is a valuation...
A high P/E does not tell you that stock is overvalued and a lower P/E does not mean that stock is undervalued. P/E is simply just another metric and what it reflect is "Investor's perception about Company's Future Earnings" Its shows "How Much investors are willing to pay for every $1 of Earnings" In September 2021, Meta Platforms' stock reached a high of $385...
What is the PE ratio? The price-to-earnings ratio or P/E is a financial ratio used to evaluate a company’s share. How is it calculated? Current market’s price / Earnings Per Share (EPS). Share price / EPS What does it show you? It shows you whether a company’s stock (based on its earnings) is: Overvalued or Undervalued. Also, it gives an indication on how...
What's up everyone, People seem to think the PE ratio is not important anymore. Everyone is about these "growth" stocks and what not. Let me just say this - and I know Warren Buffet, Charlie Munger, and Ben Graham will agree with me: if you long companies that are trading well past a 20 PE ratio, you are SPECULATING. I have no problem whatsoever with...