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To: Stock Farmer who wrote (51439)4/16/2001 9:43:21 AM
From: Dave  Read Replies (1) | Respond to of 77398
 
JOhn,

I disagree. I think PEG is a great ratio. Think of all those stocks that had high PEGs, u know? Basically, it is a ratio that compares a stock's PE to its growth rate.

Take a look at GE, with a PE around 34, but its long term growth rate is estimated at 11%. Thus a PEG a little above 3. That's a huge premium to pay for a company when the economy is slowing down.