Session 12: Equity Investments: Valuation Models Reading 42: Market-Based Valuation: Price and Enterprise Value Multiples
LOS v: Explain the use of stock screens in investment management.
An analyst uses a database program to select all companies that meet the following characteristics:
- P/E between 6 and 24
- Earnings growth over last 3 quarters.
- P/B less than 4.
This is an example of:
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B) |
the prudent investor rule. | |
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A stock screen searches a database and selects only those stocks which meet the specified criteria. |