When buying new stocks, is it better to have a low P E ratio or a high P E ratio?

1. Generally speaking, the lower the issue price-earnings ratio, the better, so that the value of ** may be higher, but at the same time, it is also necessary to take into account the stock price of the issue, and the higher the issue price, the better. In this way, the more funds occupied by a single signature, so that after one of them, all the funds will be more, so that the income of a single signature will be higher! Find a balance between the price-to-earnings ratio and the stock price.

1.For new stocks, there are two statistics: one is based on the first day's ** price, and the average performance of the index in the next one to two years is weaker than that of the same period.

This data comes from the United States** and has also been confirmed by Shanghai and Shenzhen**. For example, in 1997, a total of 178 new stocks were listed in Shanghai and Shenzhen, and the average decline in the coming year was calculated based on the first day's ** price. The annual average of the Shanghai Composite Index in 1998 and 1997 was 1,198 and 1,212 points respectively, which were basically the same. The annual average of the Shenzhen Composite Index is only **.

2.There is a practice that undoubtedly amplifies the first-day effect of new stocks, that is, the company's technical treatment of the past three years' performance in order to achieve a better listing effect. The general approach to this treatment is to dilute the performance of the previous year as much as possible, and improve the performance of the year of listing, so that its performance growth is higher than the actual growth rate, and the P/E ratio is lower than the actual P/E ratio.

Therefore, for new stocks, the general price-earnings ratio comparison method is not particularly significant, and what is meaningful is "the average after-tax profit per share of the current stock price in the past 4 years".

3.Another data related to new stocks is that after an average of about 50, new stocks can create good investment returns for us

Based on the lowest price within one year of listing to the highest price in three years, the average increase in 1997 new shares reached; The average increase in IPOs in 2004 was ! Based on the first day of ** price to the most ** in 3 years, the average increase of new shares in 1997 is; The average increase in IPOs in 2004 was ! are far more than the index and the arithmetic average increase over the same period.

Give you a little bitterness first, and then give you a little sweetness. This is what the IPO statistics tell us. After all, the average growth of new stocks is a little better than that of most old stocks.

That's not necessarily, a low P/E ratio may not be speculated, a high P/E ratio may be speculated, multiple daily limits, hehe.

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The P/E ratio indicates how many years after the purchase of **, through the company's earnings and dividends, etc., the cost can be recovered, so of course, the lower the P/E ratio, the better.

Extended Information: 1. What does the P/E ratio mean?

**The ratio of the market price divided by earnings per share is what we often call the price-earnings ratio, and the time to return on investment is reflected by the price-earnings ratio.

It is calculated as: P/E ratio = per share**(p) Earnings per share (e) = market capitalization of the company Net profit.

For example, 20 yuan is the stock price of a listed company, 20 yuan is the cost of your **, in the past year, the company was able to earn 5 yuan per share, and at this moment 20 5 4 times is the current price-earnings ratio. It will take 4 years for the company to earn back the money you invested.

This means that the lower the P/E ratio, the better it is, and the more valuable the investment? You can't say that, you can't apply the price-earnings ratio so directly, what is the reason, so let's talk about it to you

2. Is it better to have a high or low P/E ratio? How much is reasonable?

Because the P/E ratio of different industries is relatively different, the development trend of traditional industries is generally limited, and the P/E ratio is very low, but the development potential of high-tech enterprises is very good, so that investors will give a high valuation, resulting in a high P/E ratio.

So what is the appropriate P/E ratio? As mentioned above, the nature of different companies in different industries is different, so it is difficult to say what the price-earnings ratio is. Then again, we can still use the P/E ratio to give a useful reference to ** investors.

3. How to use the P/E ratio?

In this way, there are three ways to use the P/E ratio: the first is to go deep into the company's historical P/E ratio; the second is to compare the P/E ratio of this company with its peers and the average P/E ratio of the industry; The third point is to understand the composition of the company's net profit.

I think the most effective method is the first method, due to space limitations, I will talk to you about the first method here.

Anyone who is interested in ** knows that ** is always difficult to guess, nothing **** is always rising, and in the same way, any ** on ** can not always be in a downward trend.

When valuations are too high, the stock price decreases, and when valuations are too low, the stock price rises. That is, the real is associated with its intrinsic value and floats around its intrinsic range in a small area.

After just research, we can take an example of xx**, its P/E ratio is only a little more in the last ten years, on the other hand, the current P/E ratio of xx** is lower than the past ten years, in the undervaluation range, you can consider the value of **.

The price-earnings ratio is a more commonly used valuation indicator.

A high P/E ratio means that **** is already a bit high, and a high P/E ratio is usually actively traded and has a high turnover rate.

Transactions with low P/E ratios are inactive and turnover rates are generally low.

The P/E ratio is only a valuation indicator, and it is more appropriate to use it in conjunction with other valuation indicators, such as P/B ratio, ROE, etc.

In general, a low P/E ratio is better than a high P/E ratio.

The P/E ratio is calculated as follows: P/E ratio = market capitalization net profit. Simply understood, it is the ratio of a stock ticket to its earnings per share.

For example, the stock price of a ** is 20 yuan, and the earnings per share of the previous year is 1 yuan, then the P/E ratio is hail = 20 1 = 20.

The P/E ratio can be used to measure whether a company's value deviates. If the P/E ratio is high, it may indicate that there is a bubble and the stock price is overvalued, then the thick stock price may collapse and fall back to its true share price.

Conversely, if the P/E ratio is too low, it means that the company is worth less than it is now** and the stock price may be undervalued. The stock price in the future is likely to ** and eventually ** its true share price.

Reasonable P/E ratio

Based on historical data, a general P/E ratio of less than 15 can be considered a low P/E ratio and the stock price may be undervalued. A P/E ratio above 20 indicates that the stock price is overvalued.

And the ** with a high P/E ratio generally occurs when the company's prospects are good. Moreover, there will be deviations and lags in the calculation of the P/E ratio, so the P/E ratio can only be used as a reference, and cannot be simply understood as the lower the P/E ratio, the better or the higher the worse.

Different industries should have different P/E ratios. For example, the price-to-earnings ratio of a bank** is between 5 and 10 times all year round, but the stock price just doesn't rise. And some pharmaceutical companies or technology companies have a high price-to-earnings ratio, 30-60 times, and some are as high as more than 100 times, but the stock price has been hitting new highs.

Therefore, a low P/E ratio does not mean that it is good, and a high P/E market does not mean that it is bad.

The price-earnings ratio (abbreviated as PE or Per), also known as the "price-to-earnings ratio", "price-to-earnings ratio" or "price-to-earnings ratio (referred to as price-earnings ratio)", refers to the ratio of **** divided by earnings per share. or the market capitalisation of the company divided by the annual profit attributable to shareholders. Theoretically, a low P/E ratio is higher than a P/E ratio.

Because the P/E ratio is low, it means that the value of the stock sail filial piety ticket is underestimated, and the future profit margin is very large, but it cannot be blindly believed that a low P/E ratio is a good thing, depending on the company's net profit and industry situation. Now the brokerage app can see the ** price-earnings ratio indicator, which is still very convenient.

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Low is good. The lower the P/E ratio, the higher the value of the investment, and vice versa.

The price-earnings ratio is an important financial indicator that investors must master, also known as the price-to-earnings ratio, which is the ratio of **** divided by earnings per share. The P/E ratio reflects how many years our investment can be fully recovered through dividends when the payout ratio is 100% and the dividends are not reinvested, with the same earnings per share. In general, the lower the price-earnings ratio of a company, the lower the profitability of the market price relative to the price, indicating that the shorter the investment period, the smaller the investment risk, and the greater the investment value; Otherwise, the conclusion is the opposite.

There are two ways to calculate the P/E ratio. One is the ratio of the stock price to the earnings per share for the past year. The second is the ratio of the stock price to the current year's earnings per share.

The former is calculated based on earnings per share of the previous year, and it cannot reflect the change in investment value due to changes in earnings per share in the current year and in the future, so it has a certain lag. Buying ** is to buy the future, so the profitability of listed companies in the current year has a greater reference value, and the second price-earnings ratio reflects the actual investment value. Therefore, how to accurately estimate the earnings per share level of listed companies in the current year has become the key to grasp the value of investment.

The earnings per share of a listed company in the current year is not only related to the profitability of the enterprise, but also closely related to the change in the share capital of the enterprise. After the expansion of the share capital of a listed company, the earnings amortized to each share will decrease, and the company's price-to-earnings ratio will increase accordingly. Therefore, after a listed company issues new shares, bonus shares, bonus shares transferred from provident fund and allotment, it must dilute earnings per share in a timely manner to calculate the correct price-to-earnings ratio with guiding value.

Is the lower the P/E ratio, the better?

P/E Ratio Common stock per market Common stock earnings per share per year.

The lower the P/E ratio, the lower the buy-in-the-lowest price for a return. Earnings per share is calculated by dividing the company's net income for the trailing 12 months by the total number of shares issued and sold. Assuming that the market price of a ** is $24 and the earnings per share for the past 12 months is $3, the P/E ratio is 24 3=8.

The ** is considered to have a P/E ratio of 8 times, i.e. a profit of $1 for every $8 paid. Investors calculate the P/E ratio, which is mainly used to compare the values of different **. Theoretically, the lower the P/E ratio, the more worthwhile it is to invest.

It is not very reliable to compare P/E ratios across industries, countries, and time periods. It is more useful to compare the price-to-earnings ratio of the same kind**.

The price-earnings ratio is the ratio relationship between the reflection **** and the earnings per share (announced performance).

The calculation formula is: P/E ratio = current profit after tax per share.

The price-earnings ratio is an important indicator to measure the stock price and the profitability of the enterprise. However, because there is a certain relationship between the size of the plate, the active P/E ratio of the small plate will be higher, and the larger plate will be relatively lower, which is also normal. The higher the P/E ratio, the better, indicating that the market maker is speculating.

What does the P/E ratio on stand for? Whether the higher the P/E ratio is better or the more ** and bonds are very different investment vehicles, but there is some correlation between the two that can lead to a chain reaction between bonds and the ** market. ** and bonds can be issued by the same company, making the value of both inextricably linked to the performance of a single entity.

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The P/E ratio refers to the ratio of earnings per share to earnings per share over a period of review (usually a period of 12 months). Investors usually use this ratio to estimate the investment value of a certain **, or use this indicator to compare ** between different companies. The P/E ratio is often used as an indicator to compare whether different ratios are overvalued or undervalued.

However, when using the P/E ratio to gauge the quality of a company**, it's not always accurate.

It is generally believed that if a company's P/E ratio is too high, then it has a bubble and is overvalued. However, when a company is growing rapidly and its future earnings growth is very promising, the current high P/E ratio may be an accurate estimate of the company's value. It should be noted that when using P/E ratios to compare the investment values of different **, these ** must belong to the same industry, because the company's earnings per share are relatively close at this time, and it is only valid to compare them with each other.