How PEG ratio can help investors decide on stocksMitch Zacks
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Skousen uses further personal screening tools to choose his recommendations from the stocks that survive the screen each month. One of those techniques is to check a stock’s price/earnings to growth (PEG) ratio, as he did to choose his latest recommendation. The PEG ratio is calculated by u...
The PEG ratio is a valuation metric that considers both a company's price-to-earnings (P/E) ratio and its expected earnings growth rate. A lower PEG might indicate that a stock is undervalued, given its earnings performance and growth outlook. However, like all metrics, it's essential to ...
than its earnings growth. This means that if the company doesn't grow at a faster rate, the stock price will decrease. XYZ Micro's PEG ratio of 0.75 tells us that the company's stock is undervalued, which means it's trading in line with the growth rate and the stock price will ...
-- Written by Jake Lynch in Boston. RELATED STORIES: Goldman's 7 Best Financial Stocks for 2011 Become a fan ofTheStreetonFacebook. Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks. ...
A PEG which has a value less than 1 means that a stock is undervalued, and therefore a good investment. If the value is over 1, then the stock is overpriced. The PEG ratio is calculated by dividing the P/E ratio by the earnings growth rate. This produces similar results as that of ...
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