Undervalued Stocks = Low P/E to Growth Ratios Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Undervalued Stocks = Low P/E to Growth Ratios

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Premier who wrote (79)	9/1/1997 3:20:00 PM
From: Robert T. Quasius	of 297

I always look at the P/Es and PEG for the sector. It is true that the PEG for the dd sector is discounted, but IMHO this is because of the periodic downturns in that industry. As for the PEG for a sector being above 1.0, this tells me that the sector is overbought and due for a correction. I won't pay more than a PEG of 1.0 for a stock, and usually less than 0.5. For broadcasters and energy companies, I sometimes set this aside totally and pay attention to cash flow and cash flow growth. These companies are simply valued differently. For example, SFX Broadcasting has been showing losses for years and analysts consensus was for more losses, but the P/CF ratios were very low and cash flow was growing rapidly because this company is a consolidator of radio stations. This stock carried a number of strong buy recommendations. I bought in at 36, and was delighted recently when a buyout offer was accepted for $75 in cash plus the spin-off of the entertainment division (book value $5). Happy investing, and do pay attention to cash flow.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next