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Pastimes : Georgia Bard's Corner
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To: Ga Bard who wrote (1080)5/1/1998 8:58:00 AM
From: TraderGreg  Read Replies (1) of 9440
 
Thanks for the info. I can't remember where I saw first the term PEG. Just seemed to make sense. If P/E and growth rate are the same(PEG=1), then the stock is assumed on "track" from a price growth standpoint. It will then grow as earnings grow, same rate. If PEG is less than 1, the stock price should grow at a faster rate than earnings.

Of course, that doesn't explain MSFT whose growth rate is like half its P/E, yet it is still moving at a healthy clip.

If a stock had a P/E of 10 and no growth, then that price shouldn't move. Since we demand movement, it probably of course would fall and start to look like a preferred(assuming it paid dividends).

TG

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