Day3 [Learn to Pick Stocks] Check-In
Tap here to learn the chapters 5&6
Choose a company that you are interested in, then find out its the P/E and P/B indicator.
Pick one of them and explain the meaning in your own words.
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Shuseido : Company: Microsoft
Current PE: 31.41, Sector Average is 31.69
Current PB: 13.82, Sector Average is 11.29
PE is Price / Earning. It is most commonly used metric to determine a company's value relative to its earnings.
Darkbishop : Company: Amazon
Current PE: 46.64
Current PB: 11.13
P/B ratio means price-to-book ratio. It is a financial ratio used to compare a company's current market value to its book value. P/B ratios under 1 are considered really good investments for the company as it is indicative of an undervalued company.
101639435 : Company: Netflix
Current PE: 34.36
Current PB: 2.40
P/E means Price-to Earnings ratio. It can be calcuated by using share price divided by earnings per share. The ratio is used to determine whether a company is overvalued or undervalued. A higher PE suggests high expectations for future growth and sometimes a lower PE is preferred as it suggests expectations ar enot too high and the company will more likely to outperform earnings forecast.
Woodlands : Company : NIKE
Sector: Consumer Discretionary/apparel, footwear & accessories
Current P/E : 34.70 sector av p/e 23.94
Current P/B :14.00 sector av p/b 7.71
Appears that NIKE is overvalued compared to its counterparts in the same sector.
D4rkzZzZ : Company : Apple
Current PE : 27.06 - Average : 25.73
Current PB : 37.02 - Average : 18.69
P/E means Price-to Earnings ratio. The ratio is used to determine whether a company is overvalued or undervalued.
steady Pom pipi : Company:$Meta Platforms (FB.US)$
The current price-to-earnings ratio is 14.78 and the industry average is 22.27.
The current price-to-book ratio is 4.43, with an industry average of 5.99
The market has a lot of explanations for the price-to-earnings ratio, the written meaning is: one of the indicators to evaluate whether the stock price level is reasonable, if the price-earnings ratio of a company is too high, then the price of the stock is frothy and the value is overvalued, on the contrary, if the price-earnings ratio of a company is low, then the price of the stock has great potential. The calculation method is: stock price / earnings per share.
NayaZindagi : Company : Palantir
Current P/E: -45.11 (sector average: 31.69)
Current P/B: 10.79 (sector average : 11.29)
P/E ratio: The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its earnings per share (EPS). The price-to-earnings ratio is also sometimes known as the price multiple or the earnings multiple.
P/B ratio : The P/B ratio measures the market's valuation of a company relative to its book value. The market value of equity is typically higher than the book value of a company, P/B ratio is used by value investors to identify potential investments. P/B ratios under 1 are typically considered solid investments.
As for Palantir's statistics as shown above, it is currently undervalued.
Milk The Cow : Company: AMD
(Though it takes more time
but lucky us, moomoo apps indicators make it easy for us
. If want more accurate one, u need calculate urself.)
.
Current PE: 44.29
Current PB: 24.71
PE & PB is the fastest or direct indicator to compare it to their competitors (eg. my case here is intel)
Note: we can also use it to compare it to the average of its competitors' values
By comparing, we will roughly know if it's normal/undervalued/overvalued
Milk The Cow Milk The Cow: Having that said, u can't just rely on 1 or 2 indicators. There are "many factors" that comes in play
for making our final decision on investing in a company.
Steven Matt : Company: FUTU $Futu Holdings Ltd (FUTU.US)$
Current PE: 2.18
Current PB: 2.10-2.14
How to judge whether to evaluate with PE or PB：
Optimal indicator is PB, which means market value/net assets. PB= market value/net profit
The cyclical nature of enterprises in the financial industry is more obvious，Therefore, as a financial enterprise, Futu is more reasonable to use PB assessment.
How to judge whether the current PB is high or low：
The historical average for the last three months is 6.87, so it's relatively low now. But the industry average is now 1.88, which is lower than FUTU current PB.
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