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Green Stocks |
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Rule #1 - Do not lose money! Rule #2 - Never forget rule number 1! ( by: Warren Buffet )For comments or questions please email: : admin@equityresearch.com |
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PEG RatioThe PEG ratio is the PE Ratio /earnings to growth rate. This ratio is effective at finding out if the future expectations of how a stock will do is already built into the price.At equilibrium, all stocks are assigned a value of one. Then, those stocks that have a PEG of less than one are good values. Stocks that are above one are likely to decline. It makes sense. If a companies earnings are less than expected the stock will go down. In addition, projected earnings growth is indicative of how people feel about the future prospects of the company. This ratio was made famous by Peter Lynch in his book One Up on Wall Street. Stocks that have a PEG below .5 are a strong buy, stocks between .5 and 1.0 are a buy, stocks between 1.0 and 1.25 are a hold, and stocks between 1.25 and 1.5 are an avoid and stocks above 2.0 are a sell. In other words, try and find something that is around .5 or below. |
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