标题: equity: low P/E vs. high P/E [打印本页] 作者: Andreas42 时间: 2011-7-11 19:20 标题: equity: low P/E vs. high P/E
why company with a low P/E is more attractive? Thanks.作者: Swanand 时间: 2011-7-11 19:20
you get a higher earnings at the same price....
you paid 20$ for a share - got 10$ earnings.. vs. you paid a 100$ for a share and got 10$ earnings..
CP作者: CPATrader 时间: 2011-7-11 19:20
It's not that simple.
There is evidence that investing in low P/E stocks tends to achieve higher returns on average, all else being equal.
Low P/E could just as easily mean that the market believes that future prospects for the firm aren't great, with earnings that are expected to remain stagnant or deteriorate.作者: Sportsman 时间: 2011-7-11 19:20
this question is confusing at best. a stock could have a low p/e but higher than it's peers in the industry, so it may not be as attractive. I think the empirical evidence is for the small stocks and the P/B ratios (the FF factors).
