Most of you already know this but I will explain this for those of you that are new to stock analysis.
P/E - Price Earnings Ration
The P/E is a measure of a company's valuation based on its current stock price divided by its Earnings Per Share (EPS)
For example, I just looked at Hasbro which is trading at $75.68 and has an EPS of $4.05. Thus, 75.68/4.05=18.69.
The key is comparing the P/E of companies in the SAME sector. I would not compare Hasbro against Amazon which has a P/E of 104.02. However, I would compare Hasbro against Mattel (MAT) which is losing money and thus has a P/E of $-0.62 and thus does not have a P/E ratio since it is negative.
Thus, if I wanted to trade a stock in the Toy sector Hasbro would be the better buy over Mattel if one were just looking at the P/E ratio.
There are a number of sites that give an average P/E ratio by sector such as.
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/pedata.html
I never use just one indicator or one statistic. I mix technical analysis with financial statistics.
this information is a bit complicated for me, I don't understand well but I appreciate it anyway.
Hey nice to see you here. Thanks. Where do you live by the way?
I live in Italy
wow. hope you and your family are safe.