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Investing General discussions on investing and investments: shares, bonds, commodities, forex, and funds.

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  #1 (permalink)  
Old 10-25-2007, 08:27 PM
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Default shares Ratio

Correct me if i am wrong here but i think the best ratios are

PE/Ratio which is Price per share / EPS

but the price per share is not constant and could have jumped reflecting an expensive share price . So check it with the PE / growth ratio

Growth / PE if its less than one then its cheap.

Dividend yield is also important . Dividend per share / Price per share X 100

Book Value ratio is also good to check if the share price is reasonable .

One question where do you get the growth percentages.

P.s Any comments feel free.
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Old 10-25-2007, 11:14 PM
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Default Re: shares Ratio

I have to correct you.

P/E ratio is the worst indicator to look at for a number of reasons.

I know it is the most widely used indicator but if you judge by that your set-up for failure.

I would forget about that really fast if I would be you.

P/E ratio is very popular especially by mutual fund investors, which are the worst pro-investors in todays market place and over 75% even underperfom their benchmarks.

If you look at P/E ratios you may have a very rough ride.

Is dividend yield important?

I let everyone be the judge of that.

Out of the once that you have mentioned only the book value ratio really makes sense, forget the rest (unless you want to underperform the markets).
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Old 10-26-2007, 12:50 AM
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Default Re: shares Ratio

what other ratios should i pay attention too
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Old 10-26-2007, 04:34 PM
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Default Re: shares Ratio

It depends on what you are looking for.

Everytime I hear P/E ratios a red flag goes up and I just would forget about those.

P/E ratios belong to those financial and/or investment tools every investors should stay away from.
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