Joined: 01/Jan/2006
Location: India
Online Status: Offline
Posts: 18403
Posted: 13/Dec/2007 at 9:20am
Excellent. We can have some of our Netizians to contribute here as well.The PEG mantra is a must read for everyone.
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
Here you can use the PEG ratio (which is the P/E multiple divided by the future growth rate). As long as the PEG multiple is below 0.5 (say a P/E of 20 and growth of 40 per cent), you will be fine. On the other hand, if a company has a P/E ratio of 40 and will grow at 40 per cent, then it will take about eight years to pay back your money. You may make money in this case, but it will not be as good as in the previous case where you buy at a PEG of 0.5.
Basant jee It could be a silly question but I would appreciate ur response..
in calculation of PEG ratio above ,we need to take trailing PE or Forward PE. Again the company growth rate is the topline growth rate or bottomline growthrate we need to consider.
Joined: 01/Jan/2006
Location: India
Online Status: Offline
Posts: 18403
Posted: 13/Dec/2007 at 11:40am
In bull markets take forward PE and in bear markets trailing. It might seem funny and stupid but that is what analysts do.
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
Joined: 01/Jan/2006
Location: India
Online Status: Offline
Posts: 18403
Posted: 13/Dec/2007 at 11:51am
Generally topline, Bottomline growth can be manipulated by changing depreciation/inventory/amortizing policies etc.
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
Joined: 13/Oct/2006
Location: India
Online Status: Offline
Posts: 3542
Posted: 14/Dec/2007 at 3:20pm
by 2010 one co which is discused regularly by a korean appears may have a PEG ofanywhere between 0.32-0.40 i have taken 2010 eps at 16 and growth at 40%
understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things
Joined: 01/Jan/2006
Location: India
Online Status: Offline
Posts: 18403
Posted: 14/Dec/2007 at 3:51pm
Take the EPS at 20 and the growth at 80% till 2010 then there would be some fun. Try and be reasonable sometimes.
Edited by basant - 14/Dec/2007 at 4:03pm
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
You cannot post new topics in this forum You cannot reply to topics in this forum You cannot delete your posts in this forum You cannot edit your posts in this forum You cannot create polls in this forum You cannot vote in polls in this forum
Active Topics
Memberlist
Calendar
Search
Help
Register
Login
IP Logged
