Investing in low P/E Stocks
Not what you're looking for?
Your stock broker suggests you concentrate your portfolio on stocks with low P/E ratios. She explains that these firms are likely to be out of favor with investors, because they have a low price relative to their current earnings. Is this necessarily a good investment practice? Why or why not?
Purchase this Solution
Solution Summary
The solution examines whether stock brokers should invest in low P/E stocks. P/E stock ratios are determined.
Solution Preview
P/E ratios are a useful indicator and tool when performing valuation and comparing firms.
Price Earning ratios = Market price of equity per share/Earnings per share.
The relationship between the market price of a share of stock and the stock's current earnings per share is often stated in terms of a price-earnings ratio. The price-earnings ratio is widely used by investors as a general ...
Purchase this Solution
Free BrainMass Quizzes
Understanding the Accounting Equation
These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.
Income Streams
In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.
Organizational Behavior (OB)
The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.
Paradigms and Frameworks of Management Research
This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce