As an independent filter, 2,442 stocks have a price -
earnings ratio below 17.
The current portfolio of only one of the five top - performing methodologies — the ADR approach — has a median price -
earnings ratio below the typical exchange - listed stock.
The earlier exercise revealed that in the current market environment, a stock with a return on equity of 12 % would be considered if it's trading with a price -
earnings ratio below 17.
However, four of the five worst - performing strategies currently have portfolios with a median price -
earnings ratio below that of the typical exchange - listed stock.
The Muhlenkamp screen requires a current price -
earnings ratio below 17.
Brian Belski, chief investment strategist at BMO Capital Markets, said the S&P / TSX composite index, excluding energy stocks, is now trading at a price - to -
earnings ratio below its long - run average after its third - quarter decline -LSB-...]
I prefer a price to
earnings ratio below 20.
The Magic Formula diverges from Graham's strategy by exchanging for Graham's absolute price and quality measures (i.e. price - to -
earnings ratio below 10, and debt - to - equity ratio below 50 percent) a ranking system that seeks those stocks with the best combination of price and quality more akin to Buffett's value investing philosophy.
Next, we look for businesses that have a price - to -
earnings ratio below 15 and a price - to - book below 1.5.
Not exact matches
The differences in opinion arise primarily over valuation and whether its rapid growth can continue to justify a price - to -
earnings ratio that rarely falls
below 40 and has peaked as high as 138.
«We believe if JPM can successfully resolve its regulatory and legal headline risk in a timely manner, the stock could reverse its recent underperformance that has resulted in trading at a
below - peer forward (price to
earnings ratio) of 8.8 times despite our expectations of above - average profitability in 2014,» Matthew Burnell, an analyst at Wells Fargo Securities, wrote in a research note Thursday following the fine.
Some European equity indices — Germany's DAX and France's CAC 40 — are at long - term price - to -
earnings ratios of around 10 times, well
below their historic average.
This is one reason why the S&P 500 trades at a price / book value
ratio of nearly 6, compared to a historical norm
below 2.0: companies have created virtually no underlying shareholder value by retaining
earnings rather than paying them out as dividends.
Fitch Ratings, confirming its BBB rating — the second - lowest investment grade — and a stable outlook, said today the rating «would come under pressure» if there was no clear expectation of the Paris - based company's
ratio of adjusted net debt to
earnings staying
below 2.5 times in the «medium» term.
Longer - term metrics, such as cyclically adjusted price - to -
earnings, or CAPE,
ratios, are even more troubling, suggesting that U.S. stocks are likely to produce, at best, average to
below - average returns over the next five years.
These conditions comprise the following: S&P 500 overvalued with the Shiller P / E (the
ratio of the S&P 500 to the 10 - year average of inflation - adjusted
earnings) greater than 18; overbought with the S&P 500 within 3 % of its upper Bollinger band (2 standard deviations above the 20 - period average) at daily, weekly, and monthly resolutions, more than 7 % above its 52 - week smoothing, and more than 50 % above its 4 - year low; overbullish with the 2 - week average of advisory bullishness (Investors Intelligence) greater than 52 % and bearishness
below 28 %; and yields rising with the 10 - year Treasury bond yield higher than 6 - months earlier.
At my time of purchase the Price /
Earnings (PE)
ratio was 16.75,
below the 5 year average of 18.18.
The Price /
Earnings (P / E)
ratio is 19.07,
below the 5 year average of 23.72, and well
below the Insurance industry's 5 year average of 28.36.
Below are two of the best long run valuation metrics for US equities: Tobin's Q
ratio or replacement cost and CAPE or the cyclically adjusted price to
earnings or PE
ratio.
A value stock, on the other hand, refers to shares of a company with solid fundamentals that are priced
below those of its peers, based on analysis of price /
earnings ratio, yield, and other factors.
Typically, I like this
ratio to be well
below 80 % as it would indicate a sustainable dividend yield with room for future growth based on current
earnings.
The price / peak -
earnings multiple is the
ratio of the S&P 500 to the highest level of
earnings attained to date, even if current
earnings on the index have declined
below that peak.
For example, since 1950, the S&P 500 has enjoyed total returns averaging 33.18 % annually during periods when the S&P 500 price / peak
earnings ratio was
below 15 and both 3 - month T - bill yields and 10 - year Treasury yields were
below their levels of 6 months earlier.
The index's trailing price - to -
earnings (P / E)
ratio sits at around 12, significantly
below the historical average of 16.
One method I use is to take a look at the price - to -
earnings ratio (P / E
ratio), which tells you if the stock is trading above or
below its value.
We seek to invest in companies that generally reflect the following value characteristics: price /
earnings and price / book
ratios at, or
below, the market and a dividend yield at, or above, the market.
In summary, current S&P 500
earnings forecasts indicate 12 - month trailing
earnings - price
ratios rising from
below to above generational «normal» over the next two years.
Not in the case of Apple, which currently trades for a price to
earnings ratio of 18.5 times, well
below the 26.8
ratio of the S&P 500.
The Price /
Earnings (P / E)
ratio is 12.2, slightly above the 5 year average of 10.5, but well
below the Insurance industry's 5 year average of 20.8.
Not only are the
earnings and revenue growth rates for the companies
below what they achieved in Q3 and the 4 - quarter average, but the beat
ratios are weaker as well.
IBM expects to produce at least $ 13.80 in adjusted
earnings this year, putting the PE
ratio below 12.
UBS strategist David Cassidy says local shares offer relatively good value based on a market wide price to
earnings ratio based on 12 months forward
earnings below a multiple of 13.
The two eventually compromised and used 60 %
below the average price -
earnings ratio high.
A stock should have a price -
earnings ratio that is 60 %
below its previous two - year average high.
Instead, Rea suggested requiring the price -
earnings ratio to be 70 %
below its high.
Since 1962 the yield on the U.S. 10 - year Treasury note has explained roughly 25 % to 30 % of the variation in U.S. large cap equity multiples, as measured using the trailing price - to -
earnings (P / E)
ratio in the chart
below.
For instance, they may want to see a p / e
ratio (the
ratio of a stock's price to its per - share
earnings)
below 15.0, along with an
earnings growth rate of 20 % or more a year, and perhaps a 2 % dividend yield.
They must have higher
earnings than one year earlier and they must have price - to - sales
ratios below 1.5.
The years where the smoothed P / E
ratio, after climbing above about 23 times trailing
earnings, then fell
below that level are: 1900, 1929, 1965, 2002, and 2007.
The Schiller CAPE
ratio would tell you to buy when stocks trade for
below the median cyclically - adjusted
earnings and slow your purchases, or sell, when stocks trade above the median.
The evidence may even point in the opposite direction on this score: The price - to -
earnings ratio — what it costs to buy a dollar of a company's profit — for stocks in the Standard & Poor's 500 Index is 16 percent
below the level at the end of 2009.
For instance, they may want to see a p / e
ratio (the
ratio of a stock price to its per - share
earnings)
below 15.0, say, along with an
earnings growth rate of 20 % or more annually, and perhaps a 2 % dividend yield.
Percentile rank of price -
earnings ratio is
below a given measure (i.e., percent rank less than or equal to 20 %)
Between 1995 and the financial crisis, the average price - to -
earnings (P / E)
ratio of the S&P 500 utilities sector was roughly 25 percent
below the P / E of the broader market, as Bloomberg data indicates.
Below are six stocks with low debt
ratios and solid
earnings growth predictions.
In addition, at 14.3 - times estimated next - twelve - month
earnings, the price - to -
earnings ratio of the S&P 500 ® is only slightly
below the historical average.
The price - to -
earnings ratio of Praxair's competitors is shown
below to give an idea how the company's valuation compares to its peers:
For starters, and as a general rule of thumb, super-fast growth stocks can be considered at fair value if their P / E
ratio is equal to, or preferably
below, their
earnings growth rates.
As seen
below, the company has maintained an
earnings payout
ratio below 30 % for the last decade.
Even though the market has applied a normal P / E
ratio of 17, which is significantly
below this super-fast growing company's
earnings growth rate, long - term performance has approximated
earnings growth.