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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: davep who wrote (14502)	9/11/1998 11:23:00 AM
From: Jenna	Respond to of 120523

PEG is the price-to-earnings-to-growth ratio. . If say a company has a P/E of 15 an EPS of $1.00 and the estimated growth rate going forward is 20%. 15 divided by 20 makes .75.. which is the P(price) E(earnings) G(growth) ratio. The full value is $20, which we find by multiplying the earnings per share ($1.00) by the growth rate (20%).. The most alluring stocks trade at .25 to .50.. But this is just a valuation indicator and like all indicators it's just one gauge among many. It helps though mostly by weeding out companies that trade at PEG's of 1.00 or more. Now if you add that this company has a solid earnings growth rate and beats earnings projections, your chances of having found a stock likely to appreciate in value increases that much more.