Look at PEG ratio and not P/E. 4 stocks that could be possible wealth creator

A long-term growth rate of at least 20% is applied to arrive at the list. Long-term growth rate is a compounded annual growth rate which takes into the consideration the current & projected EPS values.


As Nifty and broader market corrects, judged on the basis of price earning (PE) ratio some stocks may start to look cheap. More often than not, relying on PE may lead to wrong investment decisions given the huge difference in what is value and what looks cheap due to one financial ratio. The PEG ratio is a better indicator than many other ratios especially P/E which is followed by the majority. The selected list applies different algorithms for all BSE and NSE stocks. For the purpose of this article, we have taken only NSE stocks into consideration.

The price earning ratio is one of the most overused and misused ratios in the valuation matrix, it is used by all and sundry to justify their valuations and create mirage of value. Most of the time relying on this ratio may lead to wrong investment decisions given that cheap always does not mean value. It is extremely important to keep this in mind given the current market conditions, where corrections may continue for some time and there are

  • SAVE

Uh-oh! This is an exclusive story available for selected readers only.

Worry not. You’re just a step away.

Login to read the full story.

Unlock your 30 days free access
to ETPrime now.

Login to Unlock

*No card details required

Why ?

  • Exclusive Economic Times Stories, Editorials & Expert opinion across 20+ sectors

  • Stock analysis. Market Research. Industry Trends on 4000+ Stocks

  • Clean experience with
    Minimal Ads

  • Comment & Engage with ET Prime community

  • Exclusive invites to Virtual Events with Industry Leaders

  • A trusted team of Journalists & Analysts who can best filter signal from noise

Source link

One Comment on “Look at PEG ratio and not P/E. 4 stocks that could be possible wealth creator”

Leave a Reply

Your email address will not be published. Required fields are marked *