Peter Lynch has invented a Ratio one named PEG or Price to Earnings Growth Ratio and Lynch say P/E only what may be not as much as with the dictate that we compare the P/E with the Growth Rate of Earnings per share (EPS, or earnings per share) of the company, and that means that A company might have a P/E ratio as high as 20 P/E, which means that the stocks may be too expensive, Lynch., principle and reason of the PEG Ratio that A company's shares can have a high P/E and still interesting, we will go to investment. If A company has a growth of earnings per share (EPS Growth Rate) at the appropriate level, which means that even a high P/E is a discrete but if A company's P/E is less than or equal to the growth rate of A company's earnings per share by comparing A company's shares and will remain attractive, and even if the P/E is less than half the Growth rate of the EPS, and then the stock will be even more interesting to visit.For example, A stock company with P/E is only 20 and has estimated growth rate values, on the other hand, year-on-year 5 EPS ahead at 20%, meaning that the PEG is equal to 1 [2], which means that the market has given the company's stock price reflects A growth of earnings per share was appropriate and fit. But if A company's shares have more than only 1 PEG, it will mean that the market is trading at A price that is greater than when compared with the growth of earnings per share (Overvalue) or if they see clearly, that is, the overall market forecast profit growth in the future, it will grow again. People willing to pay expensive. I believe that future earnings will be better than expected, and the stock will grow much faster than anticipated, so the stock with a highest category partner PEG Growth Stocks is often best stocks with PEG Ratio below 1 means the stock is trading at a price that is lower than the value that ought to be the low price (Undervalue) or better EPS growth.
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