5 ms·
Stocks with a low P/E ratio. I.e. the total market cap is low relative to their earnings.
by skohan 6y ago
Stocks with a low P/E ratio. I.e. the total market cap is low relative to their earnings.
- dmurray 6y agoThat's not the definition used in the article, which looks at stocks which have low market cap compared to book value, i.e. total reported assets.
- mcguire 6y agoThose are two valid definitions of value stocks. Earnings are easy to calculate but not terribly good. Book value is a better measure but it's just a made-up number.
- mxschumacher 6y agoThe p/e ratio is extremely crude and should be avoided at all costs. The metric completely disregards capital structure (debt to equity) and uses earnings at a single point in time. Earnings can easily be manipulated. Better to look at Enterprise value / free cash flow