A beginner's guide to p/e ratios - MoneyWeek Investment Tutorials
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- čas přidán 23. 09. 2010
- The p/e ratio is the main measure analysts use to determine a company's position relative to the rest of the market.
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I've watched so many videos explaining this principle. Yours was the most clear; no other teacher explained the MEANING of this principle. Thanks.
Sir you make the hard subjects in investment very easy and attractive to learn. You are giving best examples and you are a charismatic person.
Thank you for spending your valuable time sharing your knowledge. Will pray to God you live a long healthy life and continue doing financial educational videos.
This guy is so excellent, he was made to teach people..:)
I'm new to the financial/investing sector; these videos help me understand these concepts with greater ease - thanks!
Absolutely brilliant explanation! Simple is the way mate and thanks again!
Great Explanation ! Thank you
Thanks! the best explanation of p/e ratio I found on youtube for beginner's investors. Thanks a lot!
Great video. Thanks. I understand more about the P/E ratio with your video than from many written articles.
For anyone else who wants it that earnings per share video as background to this one is under "what is earnings per share" and listed about half way down the page. Tim.
Good video, basic, clear, and with good flow. Thank you
Very Simple and helpful . Good job
helped me a TON better than any class I have took
Thank you, this was very helpful.
You can get a FTSE p/e from financial websites such as digitallook or hemscott and it is also published at the back of the FT in the markets section. Tim.
Wonderful explanation!
Thank you. So much more helpful than textbook.
420p per share? isn't that a little... high?
thank you very very much for the fantastic explanation!
very helpful and well-done!!!
Brilliant. This video explains it well . I'm new to investing and found lots of people giving lectures on youtube saying high PE is good and low is Bad, but this is wrong. Looking at the formula there are still other factors to take into account.
Best video of P/E ratio on youtube!
ur an excellent teacher !!
Thanks, very helpful
Very helpful. Tnx indeed
Great Explanation .
Thanks for the upload.
Very useful sir.....
Good stuff. Thanks
Thank you very much..very nice
Brilliant video! Thanks very much for this :)
you're brilliant thank you very much
Thank you so much for explaining in detail, very helpful in understanding. I am a mature (age 35 going on 36) BSc Accounting and Finance International (Black American) student.
Thanks for the informations
Perfect explenation ! Thanks !!!!
Many thanks for the video :-) It was very informative.....
Thanks a lot - very clear info. congrats. looking forward to watching more interesting videos like this one. bye
great vid
A much better valuation metric is the EV/FCF ratio - a low P/E ratio company isn't necessarily cheap, because if their CAPEX and debt repayments are through the roof, we as shareholders never get paid - this effectively defeats the purpose of investing, which is to get more money out than we put in and not have it going to the bank!
hie ,
i want to know why we use pe ratio and eps to calculate under value or overvalue of share.what is the essence of using only those two but not pb ratio
Every company has a PE. Sometimes it is just not stated. You need to look at it in the Annual Reports or financial statements.
Thanks for info great video. I was watching on then you said Boo com too. That went where Tesco did today :) Whoops!
Share price at £4.20. I see what you did there...
Your videos are quite good. One question: why do you use always TESCO for the examples?
Excellent job. Please attach a mic to your shirt next time. I was terrified that a pop up ad would come and blast my ears off.
Good
Today i come to this am late too much but i will start
Can anyone provide a link to the FTSE 100 P/E mentioned in the video. Is this figure readily available or does this have to be calculated manually?
Google is your friend
I have a question.
Isn't it wrong to say you have to wait 14 years to get your money back? Can't you always sell the shares after 1 year (after earnings of 30p per share), for more money than you bought them? It seems like you would just get 100% ROI after 14 years?
Trunks9000 I think it is not the most correct way to convey the message. A more accurate account would be saying that there is a gain of 7.14% vs. 7.69% a year in respect to each company. So you still want you P/E low and your E/P a high percent.
Great video with good info but sound quality is so terrible.
Couldn't the boo.com example with 100 p/e ratio be caused by high price per share I mean the bubble share price?
Good work but I think you failed to also note that while you are hoping that earnings per share would grow, that share price would also increase as a result of growth in EPS as the stock becomes more attractive to more investors. do you agree?
@yakuzasama01 "P" stands for pence. 100 pence equals 1 GB Pound.
well if you analyse P/E in similar companies thats quite good. But on the boo.com example you have to be very careful! P/E may be 100 and low and you wait the company to grow hard on earnings but what's the volatility? what's the risk? and bare in mind the online bubble! so never describe so vaguely these points it may totally the other way round!
You love Tesco.
I don't hear clearly the main ideas about Boo.com with P/E of 100, what does it mean?
Essentially - if you were going to buy shares in Boo.com, you would be buying them on the expectation that earnings will increase due to factors outside the scope of the ratio. (For example, their innovative product or processes.)
Hello I hope you can answer my question. I have a homework as follow
Common Stock, $3 par value, year 2 $300,000 Year 1 $300,000
during year 2 totaled common stock $5,000. The market price of common stock at the end of year 2 was $0.97 per share
so P/E earnings = 3/0.97 = 3,093
Please if you can help me
Keep studdying
EXCELLENT, BUT GET A BETTER MIC.
Hi, have you wondered this program called the Intellitus Cash System? (do a google search). My father says it makes people plenty of cash.
Loved your video :) But got few doubts in the examples you provided
1) If P/E =14 times , you said it would take 14 years you to get your money back in other words. But one gets only dividends right? so shouldn't price per share be compared to dividends per share to find how many years will it take one to get his money back.
2) is P/E = 100 for boo.com, how can EPS be high for boo.com ? if EPS is high then P/E should be lower .
Got confused :( it would be nice if you could answer ;) Thanks.
He will not answer
How low can a P/E be?? Northern Electric PLC (NTEA_p.L) is on a PE of 1.34 that has to be a mistake right???
A lot of things could cause such a low P/E. For instance, Northern Electric PLC probably has a very low demand resulting in a fall in stock price; hence a low P/E. Or Northern Electric PLC probably has very high profit margin resulting in a high EPS. Like I said there're lots of reasons that could result in such a low P/E.
I think it varies from industry to industry, as what MrRealest say, it could be due to a high EPS.
In my opinion, a good way to see how "safe" a firm's P/E is, is to measure it against industry standards, or a few other competitors.This is to see the relative position of the firm vs others.
Wow Tesco have been hit hard since.
4.20 for tesco. is it a bargain? i dont know.
- me proceeding to buy it anyways because of "moon"
what does P mean? thanks!
aung moe san (twitter.com/moesan) price per share
Good stuff but terrible sound quality.
You say the P/E ratio indicates how many years it takes to get your money back. What about your initial investment/shares. Lets take your tesco example, if you invest £10,000 after 14 years you make £10,000 but what about your initial investment of £10,000. So does the P/E ratio indicate how long it takes to double your money? Have I misunderstood earning per share?
How high can p/e ratios go.....tesla 1160 p/e ratio
HE IS CUTE. I CAN SPEND WHOLE DAY WATCHING HIM SPEAK.
next time can you do one with dollars instead of pounds
4.2/30 is not 14 times... it's $0.14 meaning per share is undervalued as you're paying $0.14 for a share that earns $30...
Warren was wrong about one thing - you don't always have to check how much the guy who's teaching you something is earning....
Is it just me or is the sound quality terrible? I can barely understand/hear him and I was very interested.
oO0E use earphones and turn it a bit up, helped me out greatly
Calm disposition, but the narration goes a lot in circles. The presentation could be more terse and to the point.
This is lame.
What is "30p"?
How do you get that. That's why I came here and he can't explain that main thing. Do you get 4.2 and take away from something else? Does the p stand for percentage? I have so many questions
Sorry. Audio is so poor I quit after 10 seconds.
Can someone forward this to the White House? They desperately need to understand it.
Nice guy but totally doesnt understand P/E ratio, anyone with a real education will laugh at this guy no such thing as cheap and expensive in the market
that carefully disheveled, product-enhanced hairstyle is less than flattering.