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Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: LemonHead who wrote (9359)	11/24/1999 9:47:00 AM
From: Larry Grzemkowski	Respond to of 18928

Hi Keith Let me see if I can explain this better: First we must assume that fair value is when PE = EARNINGS GROWTH and therefore PE/GROWTH = 1 = PEG, the same holds true for YPEG which is the year forward ratio. What is YPEG. PE/G PE = PRICE/EARNINGS (P/E) , in this case year forward earnings G = 5 year earnings estimate Therefore YGEP = 1 , at fair value P/E/G = 1 , is fair value or P/EG=1 OR P = EG by using simple algebra OR FOR QTRN P = 1.45 X 26.5 OR 38.42 This will probably either help of confuse. Some times it is hard to see unless you actually get out a pencil and paper and do the math. Larry G