Author: Wen gogo
link: https: //www.zhihu.com/question/23192771/answer/32957811
Source: know almost
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link: https: //www.zhihu.com/question/23192771/answer/32957811
Source: know almost
copyrighted by the author. Commercial reprint please contact the author authorized, non-commercial reprint please indicate the source.
Let me talk about earnings
PE refers to a study period (usually 12 months), the ratio of stock price and earnings per share. The commonly used by investors estimate the proportion of the value of the investment value of a stock, or make comparisons between different companies using the stock index. Price-earnings ratio is usually used as an indicator whether to compare different prices are overvalued or undervalued stocks. However, when measuring the texture of a company's stock price-earnings ratio, it is not always accurate. Is generally believed that if a company's stock price-earnings ratio is too high, then the stock price has foam, it is overvalued. However, when a company is rapidly growing and very optimistic about the future growth performance, the current high stock price-earnings ratio may happen to accurately assess the value of the company. Note that, when using the price-earnings ratio to compare different investment value of stock, these shares must belong to the same industry, because the company's earnings per share are close to each other relatively effective. [] Calculation method calculation of earnings per share is the net income divided by total corporate issuance in the past 12 months the number of shares sold. The lower the price-earnings ratio, on behalf of investors to purchase the stock at a lower price in order to pay off. Suppose a stock price of 24 yuan, while earnings per share over the past 12 months to $ 3, the price-earnings ratio is 24/3 = 8. The stock is considered to have 8 times earnings, pay 8 yuan per share earnings of $ 1. Investors calculate earnings, mainly used to compare the value of different stocks. Theoretically, the lower the stock price-earnings ratio, the more worth the investment. Earnings compare different industries, different countries, different time periods are not reliable.
Compare similar stock price-earnings ratio than practical value
.
[Determinants of stock price]
Shares depending on market demand, depending on investor expectations of disguise for the following:
(1) The recent performance and future business prospects
(2) the introduction of new products or services
(3) the industry's prospects rest of the factors that affect stock price also includes market sentiment, and other emerging industries boom.
The price-earnings ratio and earnings linked up, reflecting the company's recent performance. If the stock price rises, but profits did not change, or even decline, the price-earnings ratio will rise. In general, the level of earnings as follows:
0-13: 14-20 that is undervalued: the normal level of 21-28: That is overvalued 28+: the stock market reflects a speculative bubble
[stock market] earnings dividend yield on the market The company will usually be part of the profit is distributed to shareholders as dividends. The previous year's dividend per share divided by the stock price, as is the current dividend yield. If the stock price is 50 yuan, 5 yuan per share dividend, the dividend yield of 10% last year, this number is generally on the high side, reflecting lower earnings, the stock is undervalued. In general, earnings high (e.g., greater than 100-fold) stock dividend yield of zero. Because when more than 100 times earnings, investors should represent more than 100 years to return to this, the stock is overvalued, there is no dividend.
The average price-earnings ratio
US stocks average price-earnings ratio of 14 times, represents the payback period is 14 years. PE equivalent to 14 times the average annual rate of return of 7% (1/14).
If a stock has a high price-earnings ratio, on behalf of:
(1) Market Forecast fast future earnings growth.
(2) The company has always recorded a substantial profit, but the previous year there are special one-off expenses, reducing profits.
(3) bubble, the stock to be sought after.
(4) The company has a special advantage, to ensure lasting profitability was recorded in low-risk situations.
(5) optionally the stock market is limited, under the law of supply and demand, stock prices will rise. This makes comparison of earnings across time becomes less significant.
Calculation
Using different data count out the price-earnings ratio, it has a different meaning. The current price-earnings ratio using the last four quarters of earnings per share, and forecast earnings can be used to calculate earnings over the past four quarters, can also be based on the sum of the calculated actual profit forecast two quarters and the next two quarters of profitability. Computing concepts earnings include only common stock, preferred stock does not contain. From the earnings can come out of the earnings growth rate of the city, this index added factor of earnings growth, mostly for high-growth industries and new businesses. [What is a reasonable price-earnings ratio] is not certain criteria, but individual stocks, the price-earnings ratio of the industry valuable reference mutatis mutandis; With stocks or the broader market, the historical average price-earnings ratio reference value. Price-earnings ratio of stocks, shares and the broader market is very important reference. If the stock price-earnings ratio well beyond any similar or stock market, you need to have good reason to support, which is often inseparable from the company's future earnings are expected to grow fast this focus. A company enjoys a very high price-earnings ratio, indicating that investors generally believe that the company's future earnings per share will grow rapidly, even several years after the price-earnings ratio can be reduced to a reasonable level. Once the unsatisfactory earnings growth, supporting high price-earnings ratio of power was untenable and the share price tends to fall sharply. Stock market index price-earnings ratio is a very useful reference, it is easy to understand and easy access to data, but there are many shortcomings. For example, as the denominator of the earnings per share, is based on the current accepted accounting standards to calculate, but the company often can be adjusted as appropriate depending on the need, so in theory the same two cash flows of the company, announced earnings per share may be significantly different. On the other hand, investors are also often do not believe in strict accordance with GAAP profit figures calculated faithfully reflect the company's profitability on a going concern basis. Therefore, analysts tend to be self-adjusted net official formula companies, such as to earnings before interest, taxes, depreciation and amortization profit (EBITDA) to replace net income to calculate earnings per share. In addition, as a molecular earnings, the company's market value also does not reflect the level of debt (leverage) of the company. For example, two with market capitalization of $ 1 billion, with net income of $ 100 million company, earnings were 10. But if Company A has $ 1 billion in debt, while Company B has no debt, then the earnings will not reflect this difference. Therefore, the analysts of "enterprise value (EV)" - market capitalization plus debt minus cash - substitute market value to calculate the price-earnings ratio. In theory, enterprise value / EBITDA ratio may waive some of the shortcomings purely price-earnings ratio. Several problems in different markets [earnings] horizontal comparison should pay attention to the price-earnings ratio is a very rough indicator, taking into account the comparability of earnings at different stages of the same index compares more meaningful, while the earnings of different markets when compared to the transverse should be particularly careful.
PE PE ★ (1) composite index and the index ratio, price-earnings ratio and price-earnings ratio of the component index component index ratio. Composite Index constituent stocks include all stocks (except PT shares on the Shanghai and Shenzhen market) on the market price-earnings ratio is generally relatively high, while the component index constituent stocks are carefully selected, usually larger on average equity, a better average performance , so its relatively lower price-earnings ratio. And we often see most often foreign stock index price-earnings ratio is the price-earnings ratio of ingredients, if they are compared with the earnings of our composite index, then made a conceptual error.
★ (2) price-earnings ratio should be linked to the benchmark interest rate. The benchmark interest rate is the number of people to invest frame of reference rate of return, cost of capital also reflects the level of society as a whole. In general, if other things being equal, there is a positive relationship between the inverse of the average stock market price-earnings ratio benchmark rate. If the base rate is low, reasonable price-earnings ratio can be higher, if the benchmark interest rate is high, reasonable price-earnings ratio should be lower. At present, China's central bank rediscount rate was 2.97%, one-year savings deposit rate of return of 1.80%, the US federal funds rate to 1.75%, the Fed again posted rate of 1.25%, China and the US benchmark interest rate is not very different, but the vertical view, China's current benchmark interest rate is very low. According to authoritative research shows that, according to China's current price level and the country's future proactive fiscal policy and moderate monetary policy, there is likely to cut interest rates again China.
★ (3) price-earnings ratio should be linked to the share capital. The average price-earnings ratio and total capital stock and the flow of capital are related, the smaller the total share capital and outstanding capital stock, the average price-earnings ratio will be higher (Stern Stewart & Company management consulting China, 2001), on the contrary, will be lower, in Seamus is not the case. According to statistics, in 2001 China October 16 in Shanghai and Shenzhen market, 770 samples shares (excluding the shares of PT, ST shares, loss of stock and mid-2001 earnings per share of 0.05 yuan lower than stock) arithmetic average price-earnings ratio is 29.43 times, which, the minimum total capital of 100 listed companies arithmetic average price-earnings ratio is 42.74 times, while the total share capital of 100 largest listed companies arithmetic average price-earnings ratio is only 19.82 times, 2.16 times the former is the latter. In the US, the average price-earnings ratio of small cap stocks also several times higher than the market average price-earnings ratio of stocks, NASDAQ market price-earnings ratio price-earnings ratio is higher than the New York Stock Exchange, in part, related to equity factors. Therefore, a look at the average market price-earnings ratio, also taking into account the market structure of listed companies, if the company is small capital's main market, its reasonable price-earnings ratio should be higher. If you do not consider the stock market listing of the company's capital structure, it can not explain why, even if the original listed companies price levels unchanged, as long as a Sinopec, if more on PetroChina, China Mobile, CNOOC, will be ten times the average price-earnings ratio down, it price-earnings ratio would drop so-called "reasonable area." In fact, December 31, 2001 the Shanghai A-share index dropped to 37.59 times earnings, if Sinopec is not yet available, this figure will dramatically promoted to 43.31 times.
★ (4) price-earnings ratio should be linked to the capital structure. PE also has a relationship with the capital structure. If the shares are tradable, the earnings will be lower, if the shares are not tradable, then the outstanding shares of the price-earnings ratio will be higher. The reason is that, if the total value of listed companies of the same shares into tradable shares and non-tradable shares, the liquidity of assets will increase the value of assets (liquidity premium), from the general sense that the price per share of the outstanding shares of natural higher than the price of non-tradable shares, the lower the prices of non-tradable shares, the higher the price of outstanding shares, the result is bound to be the average price-earnings ratio than the average price-earnings ratio of the outstanding shares of non-tradable shares. The smaller the proportion of outstanding shares in the share capital, the non-tradable shares tradable shares and the price difference between the larger, the higher the average price-earnings ratio of shares outstanding. The current Chinese market, non-tradable shares account for two-thirds of the total share capital, in case they are not in circulation, a higher price-earnings ratio of shares outstanding, is normal.
★ (5) should be linked to earnings growth. The same is 20 times price-earnings ratio of listed companies average annual profit growth of 7% of the market than would the average annual profit growth of listed companies 3% of the market value of investments. According to the classical model to assess the intrinsic value of the stock, as shown in equation (1). Where V is the intrinsic value of the stock, D. For the dividend per share paid in the future unlimited period, k is the yield to maturity, g is the growth rate of fixed dividend each period. From the formula (1) can be seen that, other things being equal, the growth of the intrinsic value of the stock, so a huge impact on the market price and the average price-earnings ratio. V = D. (L + g) K - g (1) To give a simplified example, assume that the net profit of listed companies and the economy grows, China's annual economic growth rate of 7 percent average annual economic growth rate of the US ,, 3%, then China stocks the intrinsic value is the average of 2.42 times the United States, China's stock market reasonable price-earnings ratio is 2.42 times the United States. From this perspective, growth, price-earnings ratio NASDAQ index is relatively high, the average price-earnings ratio of stocks in emerging market countries is relatively high, it is justified.
★ (6) earnings to some institutional factors, selectively investment of residents, investment philosophy, a national system (culture, traditions, customs, habits, etc.), foreign exchange control and other institutional factors, all related to the average price-earnings ratio .
★ (7) The average price-earnings ratio of Chinese stock market should also consider the issue price factors. Before 1997, China's reference to the prevailing level of interest rates, management's initial stock offering price control was quite strict, the initial offering price-earnings ratio is generally not more than 15 times, in order to take care in remote areas, such as Tibet Jinzhu was sent to the stock about 20 times earnings. Later, to promote market-oriented reform of the securities market, offering price controls gradually relaxed, it reached 88 times earnings in 2000 issued Fujian Electric Power, the average price-earnings ratio stocks also generally maintained at a level forty-five tenfold. Forty-five ten times the earnings release can be, the secondary market average price-earnings ratio forty-five normal times how to say no? In theory, the higher the earnings release, the more money raised, the potential development of listed companies, the stronger profitability, the higher the gold content of the book listed company assets, and this is from a static price-earnings ratio indicators I can not see out. Since the static price-earnings ratio does not fully reflect the recent issue of high price-earnings ratio impact, then the current secondary market average price-earnings ratio is slightly higher than before the year is normal. [Price-earnings ratio to judge the investment value of the stock market's price-earnings ratio] defect indicator used to measure whether the stock market average price reasonably have some inherent deficiencies:
defective ★ (1) the calculation method itself. Select the constituent stocks of the index constituents having randomness. The average price-earnings ratio calculated in various countries and market shares related to its selected sample, sample adjustments, the average price-earnings ratio also followed changes. Even the composite index, there is also a loss of influence and profit-share earnings of shares of the problem of discontinuity. For example, price-earnings ratio on the Shanghai December 31, 2001 A shares is 37.59 times, if not the year 2000, Sinopec profit 16.154 billion yuan, but the 0.01 yuan, the Shanghai A-share earnings will be upgraded to 48.53 times. More ironic it is that if Sinopec loss, it will be removed out, the Shanghai A-share earnings but reduced to 43.31 times in the calculation of earnings, so-called "price-earnings ratio, the lower the more losses."
★ (2) price-earnings ratio is very unstable. With the cyclical fluctuations of the economy, corporate earnings per share will be ups and downs, the average price-earnings ratio calculated in this way also ups and downs, in order to regulate the stock market, stock market turmoil will inevitably bring. In 1932 the US stock market downturn, the most price-earnings ratio is as high as 100 times, if pursuant to squeeze the stock market bubble, it is very absurd and dangerous, in fact, the year is the best time to enter the market in US history of epic proportions.
★ (3) Earnings per share is only one factor affecting the investment value of the stock. Investors choose stocks, not necessarily to look at earnings, it's hard to arbitrage based on price-earnings ratio, price-earnings ratio is difficult to say based on the value of certain equity investment or no investment value. It is puzzling that, price-earnings ratio of stocks explanatory power value so bad, but was used as a measure of whether the stock market is the most important basis for investment value. In fact the stock value or price is determined by many factors, with price-earnings ratio as an indicator to judge the stock price is too high or too low is very scientific.
[Earnings] a correct view
in the stock market, when people fully apply indicators to measure price-earnings ratio of stock prices, the market has become not alien will find: significant differences between the stock price-earnings ratio, and not in line to the bank rate; the higher the price-earnings ratio of stocks, the better its market performance. Price-earnings ratio is no practical sense to you? In actual fact, this is only the investors failed to grasp the correct understanding and application of the price-earnings ratio only. 1. The price-earnings ratio has overall guidance to the market
2. To measure price-earnings ratio of stock-market properties
To look at the dynamic price-earnings ratio price-earnings ratio is high, to some extent, reflects investor recognition of the company's growth potential, not only that, the same is true in Europe, America and Hong Kong markets mature vote in the Chinese stock market. From this point of view, investors are not difficult to understand why the high-tech sector of the stock price-earnings ratio close to or more than 100 times, and motorcycle manufacturing, iron and steel industry, the stock price-earnings ratio is only 20 times. Of course, this does not mean that occur when higher stock price-earnings ratio, the better, China's stock market is still in its infancy, making wanton lift stock prices, resulting in higher earnings odd, huge phenomenon of market risk, investors should be from the company background, basic quality and other aspects of pay more analysis of the level of earnings reasonable judgment. [] Indicator of the stock market bubble in addition to the price-earnings ratio, a measure of the overall stock market bubble or whether there is investment value, as well as the following indicators. (1) bonus share price support level. (2) the average share price. (3) The average sales ratio. (4) the average book value (5) marketing costs. Dynamic price-earnings ratio, price-earnings ratio of static dynamic price-earnings ratio, which is calculated based on the static price-earnings ratio for the base, multiplied by the dynamic factor, the factor of 1 / (1 + i) n, i for business growth in earnings per share ratios, n is sustainable enterprises duration of development. For example, the listed company's current share price of 20 yuan, 0.38 yuan per share, a year earlier earnings per share of 0.28 yuan, growth of 35%, that is, i = 35%, the company's future to maintain this growth rate 5 years sustainable time, i.e., n = 5, then the dynamic coefficient of 1 / (1 + 35%) = 5 22%. Accordingly, the dynamic price-earnings ratio of 11.6 times, ie:? 52 (static PE: 20 RMB yuan /0.38 = 52) × 22%. In comparison, the big difference, I believe that ordinary investors would be looked surprised, and suddenly. The dynamic price-earnings ratio theory tells us that a simple simple but profound truth, that is invest in stocks sure to choose a sustained growth of the company. So, we can easily understand why the asset restructuring will be the eternal theme of the market, and the poor performance of some companies to become the dark horse in the market reorganizing substantive support. PE = Price / earnings per share by your first question if the above formula can be mechanically answer a target price and earnings per share is proportional to. Generally such textbooks are taught. But the fact is it really? In fact, as long as the price-earnings ratio of depth to ask this formula, we know this formula is itself problematic: First, the market price using the current stock price, earnings per share but what is it used? Listed companies publish annual reports once a year, you know, this year it just last year's earnings, then you use the current price divided by earnings last year, what is it? So, to answer your second question, that is, you buy steel stocks Why the low price-earnings ratio, but not up yet? Because the steel industry began in 2003 at the peak of the business cycle, so good gains in recent years, greatly pulled down earnings. It was not the low price-earnings ratio on behalf of your stock must rise does not necessarily. Because the stock is expected to speculation, the future stock, we are expected steel industry boom peak has passed, the future is difficult to maintain such a high profit, so now you use earnings per share calculated static price-earnings ratio last year, can not explain the problem. The average price-earnings ratio is indeed a big difference in other industries, such as price-earnings ratio is generally high-tech stocks, because everyone is better for his future growth is expected, and some traditional cyclical sectors such as steel metal, is relatively low. In fact, many times earnings with a little more to the case of mutual comparison, because the domestic industry is difficult to compare different, so foreign and compare different value systems the following reference pricing standard is more meaningful. For example, in foreign iron and steel average price-earnings ratio is 13, the average that China is 8, so generally considered undervalued. But whether it underestimated? This is a matter of personal judgment and values of. Finally, irrespective of the net assets per share and earnings. And related book value, equal to the market price per share divided by net assets. The average price-earnings ratio is indeed a big difference in other industries, such as price-earnings ratio is generally high-tech stocks, because everyone is better for his future growth is expected, and some traditional cyclical sectors such as steel metal, is relatively low. In fact, many times earnings with a little more to the case of mutual comparison, because the domestic industry is difficult to compare different, so foreign and compare different value systems the following reference pricing standard is more meaningful. For example, in foreign iron and steel average price-earnings ratio is 13, the average that China is 8, so generally considered undervalued. But whether it underestimated? This is a matter of personal judgment and values of. Finally, irrespective of the net assets per share and earnings. And related book value, equal to the market price per share divided by net assets. The average price-earnings ratio is indeed a big difference in other industries, such as price-earnings ratio is generally high-tech stocks, because everyone is better for his future growth is expected, and some traditional cyclical sectors such as steel metal, is relatively low. In fact, many times earnings with a little more to the case of mutual comparison, because the domestic industry is difficult to compare different, so foreign and compare different value systems the following reference pricing standard is more meaningful. For example, in foreign iron and steel average price-earnings ratio is 13, the average that China is 8, so generally considered undervalued. But whether it underestimated? This is a matter of personal judgment and values of. Finally, irrespective of the net assets per share and earnings. And related book value, equal to the market price per share divided by net assets.
PE PE ★ (1) composite index and the index ratio, price-earnings ratio and price-earnings ratio of the component index component index ratio. Composite Index constituent stocks include all stocks (except PT shares on the Shanghai and Shenzhen market) on the market price-earnings ratio is generally relatively high, while the component index constituent stocks are carefully selected, usually larger on average equity, a better average performance , so its relatively lower price-earnings ratio. And we often see most often foreign stock index price-earnings ratio is the price-earnings ratio of ingredients, if they are compared with the earnings of our composite index, then made a conceptual error.
★ (2) price-earnings ratio should be linked to the benchmark interest rate. The benchmark interest rate is the number of people to invest frame of reference rate of return, cost of capital also reflects the level of society as a whole. In general, if other things being equal, there is a positive relationship between the inverse of the average stock market price-earnings ratio benchmark rate. If the base rate is low, reasonable price-earnings ratio can be higher, if the benchmark interest rate is high, reasonable price-earnings ratio should be lower. At present, China's central bank rediscount rate was 2.97%, one-year savings deposit rate of return of 1.80%, the US federal funds rate to 1.75%, the Fed again posted rate of 1.25%, China and the US benchmark interest rate is not very different, but the vertical view, China's current benchmark interest rate is very low. According to authoritative research shows that, according to China's current price level and the country's future proactive fiscal policy and moderate monetary policy, there is likely to cut interest rates again China.
★ (3) price-earnings ratio should be linked to the share capital. The average price-earnings ratio and total capital stock and the flow of capital are related, the smaller the total share capital and outstanding capital stock, the average price-earnings ratio will be higher (Stern Stewart & Company management consulting China, 2001), on the contrary, will be lower, in Seamus is not the case. According to statistics, in 2001 China October 16 in Shanghai and Shenzhen market, 770 samples shares (excluding the shares of PT, ST shares, loss of stock and mid-2001 earnings per share of 0.05 yuan lower than stock) arithmetic average price-earnings ratio is 29.43 times, which, the minimum total capital of 100 listed companies arithmetic average price-earnings ratio is 42.74 times, while the total share capital of 100 largest listed companies arithmetic average price-earnings ratio is only 19.82 times, 2.16 times the former is the latter. In the US, the average price-earnings ratio of small cap stocks also several times higher than the market average price-earnings ratio of stocks, NASDAQ market price-earnings ratio price-earnings ratio is higher than the New York Stock Exchange, in part, related to equity factors. Therefore, a look at the average market price-earnings ratio, also taking into account the market structure of listed companies, if the company is small capital's main market, its reasonable price-earnings ratio should be higher. If you do not consider the stock market listing of the company's capital structure, it can not explain why, even if the original listed companies price levels unchanged, as long as a Sinopec, if more on PetroChina, China Mobile, CNOOC, will be ten times the average price-earnings ratio down, it price-earnings ratio would drop so-called "reasonable area." In fact, December 31, 2001 the Shanghai A-share index dropped to 37.59 times earnings, if Sinopec is not yet available, this figure will dramatically promoted to 43.31 times.
★ (4) price-earnings ratio should be linked to the capital structure. PE also has a relationship with the capital structure. If the shares are tradable, the earnings will be lower, if the shares are not tradable, then the outstanding shares of the price-earnings ratio will be higher. The reason is that, if the total value of listed companies of the same shares into tradable shares and non-tradable shares, the liquidity of assets will increase the value of assets (liquidity premium), from the general sense that the price per share of the outstanding shares of natural higher than the price of non-tradable shares, the lower the prices of non-tradable shares, the higher the price of outstanding shares, the result is bound to be the average price-earnings ratio than the average price-earnings ratio of the outstanding shares of non-tradable shares. The smaller the proportion of outstanding shares in the share capital, the non-tradable shares tradable shares and the price difference between the larger, the higher the average price-earnings ratio of shares outstanding. The current Chinese market, non-tradable shares account for two-thirds of the total share capital, in case they are not in circulation, a higher price-earnings ratio of shares outstanding, is normal.
★ (5) should be linked to earnings growth. The same is 20 times price-earnings ratio of listed companies average annual profit growth of 7% of the market than would the average annual profit growth of listed companies 3% of the market value of investments. According to the classical model to assess the intrinsic value of the stock, as shown in equation (1). Where V is the intrinsic value of the stock, D. For the dividend per share paid in the future unlimited period, k is the yield to maturity, g is the growth rate of fixed dividend each period. From the formula (1) can be seen that, other things being equal, the growth of the intrinsic value of the stock, so a huge impact on the market price and the average price-earnings ratio. V = D. (L + g) K - g (1) To give a simplified example, assume that the net profit of listed companies and the economy grows, China's annual economic growth rate of 7 percent average annual economic growth rate of the US ,, 3%, then China stocks the intrinsic value is the average of 2.42 times the United States, China's stock market reasonable price-earnings ratio is 2.42 times the United States. From this perspective, growth, price-earnings ratio NASDAQ index is relatively high, the average price-earnings ratio of stocks in emerging market countries is relatively high, it is justified.
★ (6) earnings to some institutional factors, selectively investment of residents, investment philosophy, a national system (culture, traditions, customs, habits, etc.), foreign exchange control and other institutional factors, all related to the average price-earnings ratio .
★ (7) The average price-earnings ratio of Chinese stock market should also consider the issue price factors. Before 1997, China's reference to the prevailing level of interest rates, management's initial stock offering price control was quite strict, the initial offering price-earnings ratio is generally not more than 15 times, in order to take care in remote areas, such as Tibet Jinzhu was sent to the stock about 20 times earnings. Later, to promote market-oriented reform of the securities market, offering price controls gradually relaxed, it reached 88 times earnings in 2000 issued Fujian Electric Power, the average price-earnings ratio stocks also generally maintained at a level forty-five tenfold. Forty-five ten times the earnings release can be, the secondary market average price-earnings ratio forty-five normal times how to say no? In theory, the higher the earnings release, the more money raised, the potential development of listed companies, the stronger profitability, the higher the gold content of the book listed company assets, and this is from a static price-earnings ratio indicators I can not see out. Since the static price-earnings ratio does not fully reflect the recent issue of high price-earnings ratio impact, then the current secondary market average price-earnings ratio is slightly higher than before the year is normal. [Price-earnings ratio to judge the investment value of the stock market's price-earnings ratio] defect indicator used to measure whether the stock market average price reasonably have some inherent deficiencies:
defective ★ (1) the calculation method itself. Select the constituent stocks of the index constituents having randomness. The average price-earnings ratio calculated in various countries and market shares related to its selected sample, sample adjustments, the average price-earnings ratio also followed changes. Even the composite index, there is also a loss of influence and profit-share earnings of shares of the problem of discontinuity. For example, price-earnings ratio on the Shanghai December 31, 2001 A shares is 37.59 times, if not the year 2000, Sinopec profit 16.154 billion yuan, but the 0.01 yuan, the Shanghai A-share earnings will be upgraded to 48.53 times. More ironic it is that if Sinopec loss, it will be removed out, the Shanghai A-share earnings but reduced to 43.31 times in the calculation of earnings, so-called "price-earnings ratio, the lower the more losses."
★ (2) price-earnings ratio is very unstable. With the cyclical fluctuations of the economy, corporate earnings per share will be ups and downs, the average price-earnings ratio calculated in this way also ups and downs, in order to regulate the stock market, stock market turmoil will inevitably bring. In 1932 the US stock market downturn, the most price-earnings ratio is as high as 100 times, if pursuant to squeeze the stock market bubble, it is very absurd and dangerous, in fact, the year is the best time to enter the market in US history of epic proportions.
★ (3) Earnings per share is only one factor affecting the investment value of the stock. Investors choose stocks, not necessarily to look at earnings, it's hard to arbitrage based on price-earnings ratio, price-earnings ratio is difficult to say based on the value of certain equity investment or no investment value. It is puzzling that, price-earnings ratio of stocks explanatory power value so bad, but was used as a measure of whether the stock market is the most important basis for investment value. In fact the stock value or price is determined by many factors, with price-earnings ratio as an indicator to judge the stock price is too high or too low is very scientific.
[Earnings] a correct view
in the stock market, when people fully apply indicators to measure price-earnings ratio of stock prices, the market has become not alien will find: significant differences between the stock price-earnings ratio, and not in line to the bank rate; the higher the price-earnings ratio of stocks, the better its market performance. Price-earnings ratio is no practical sense to you? In actual fact, this is only the investors failed to grasp the correct understanding and application of the price-earnings ratio only. 1. The price-earnings ratio has overall guidance to the market
2. To measure price-earnings ratio of stock-market properties
To look at the dynamic price-earnings ratio price-earnings ratio is high, to some extent, reflects investor recognition of the company's growth potential, not only that, the same is true in Europe, America and Hong Kong markets mature vote in the Chinese stock market. From this point of view, investors are not difficult to understand why the high-tech sector of the stock price-earnings ratio close to or more than 100 times, and motorcycle manufacturing, iron and steel industry, the stock price-earnings ratio is only 20 times. Of course, this does not mean that occur when higher stock price-earnings ratio, the better, China's stock market is still in its infancy, making wanton lift stock prices, resulting in higher earnings odd, huge phenomenon of market risk, investors should be from the company background, basic quality and other aspects of pay more analysis of the level of earnings reasonable judgment. [] Indicator of the stock market bubble in addition to the price-earnings ratio, a measure of the overall stock market bubble or whether there is investment value, as well as the following indicators. (1) bonus share price support level. (2) the average share price. (3) The average sales ratio. (4) the average book value (5) marketing costs. Dynamic price-earnings ratio, price-earnings ratio of static dynamic price-earnings ratio, which is calculated based on the static price-earnings ratio for the base, multiplied by the dynamic factor, the factor of 1 / (1 + i) n, i for business growth in earnings per share ratios, n is sustainable enterprises duration of development. For example, the listed company's current share price of 20 yuan, 0.38 yuan per share, a year earlier earnings per share of 0.28 yuan, growth of 35%, that is, i = 35%, the company's future to maintain this growth rate 5 years sustainable time, i.e., n = 5, then the dynamic coefficient of 1 / (1 + 35%) = 5 22%. Accordingly, the dynamic price-earnings ratio of 11.6 times, ie:? 52 (static PE: 20 RMB yuan /0.38 = 52) × 22%. In comparison, the big difference, I believe that ordinary investors would be looked surprised, and suddenly. The dynamic price-earnings ratio theory tells us that a simple simple but profound truth, that is invest in stocks sure to choose a sustained growth of the company. So, we can easily understand why the asset restructuring will be the eternal theme of the market, and the poor performance of some companies to become the dark horse in the market reorganizing substantive support. PE = Price / earnings per share by your first question if the above formula can be mechanically answer a target price and earnings per share is proportional to. Generally such textbooks are taught. But the fact is it really? In fact, as long as the price-earnings ratio of depth to ask this formula, we know this formula is itself problematic: First, the market price using the current stock price, earnings per share but what is it used? Listed companies publish annual reports once a year, you know, this year it just last year's earnings, then you use the current price divided by earnings last year, what is it? So, to answer your second question, that is, you buy steel stocks Why the low price-earnings ratio, but not up yet? Because the steel industry began in 2003 at the peak of the business cycle, so good gains in recent years, greatly pulled down earnings. It was not the low price-earnings ratio on behalf of your stock must rise does not necessarily. Because the stock is expected to speculation, the future stock, we are expected steel industry boom peak has passed, the future is difficult to maintain such a high profit, so now you use earnings per share calculated static price-earnings ratio last year, can not explain the problem. The average price-earnings ratio is indeed a big difference in other industries, such as price-earnings ratio is generally high-tech stocks, because everyone is better for his future growth is expected, and some traditional cyclical sectors such as steel metal, is relatively low. In fact, many times earnings with a little more to the case of mutual comparison, because the domestic industry is difficult to compare different, so foreign and compare different value systems the following reference pricing standard is more meaningful. For example, in foreign iron and steel average price-earnings ratio is 13, the average that China is 8, so generally considered undervalued. But whether it underestimated? This is a matter of personal judgment and values of. Finally, irrespective of the net assets per share and earnings. And related book value, equal to the market price per share divided by net assets. The average price-earnings ratio is indeed a big difference in other industries, such as price-earnings ratio is generally high-tech stocks, because everyone is better for his future growth is expected, and some traditional cyclical sectors such as steel metal, is relatively low. In fact, many times earnings with a little more to the case of mutual comparison, because the domestic industry is difficult to compare different, so foreign and compare different value systems the following reference pricing standard is more meaningful. For example, in foreign iron and steel average price-earnings ratio is 13, the average that China is 8, so generally considered undervalued. But whether it underestimated? This is a matter of personal judgment and values of. Finally, irrespective of the net assets per share and earnings. And related book value, equal to the market price per share divided by net assets. The average price-earnings ratio is indeed a big difference in other industries, such as price-earnings ratio is generally high-tech stocks, because everyone is better for his future growth is expected, and some traditional cyclical sectors such as steel metal, is relatively low. In fact, many times earnings with a little more to the case of mutual comparison, because the domestic industry is difficult to compare different, so foreign and compare different value systems the following reference pricing standard is more meaningful. For example, in foreign iron and steel average price-earnings ratio is 13, the average that China is 8, so generally considered undervalued. But whether it underestimated? This is a matter of personal judgment and values of. Finally, irrespective of the net assets per share and earnings. And related book value, equal to the market price per share divided by net assets.