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Casual Articles - Using the P/E Ratio or Price/Earnings Ratio to Evaluate Stocks
Do you remember: ‘I' ll make him an offer he can’t refuse” - From the movie: The Godfather. Why? It was dramatised and in terms of what Don Corleone was trying to say: “Do as I say or I’ll kill you!”, I’m pretty sure you have a good picture in your mind. That’s drama.Another movie moment everyone remembers is at the end of the academy award winning movie: Gone With The Wind. You are probably saying it right now. Let’s say it together: “Frankly my dear, I don’t give a damn!”. Once again, you remember the experience because it was dramatised.
- Google Inc.
- P/E = 73.44
- Yahoo! Inc.
- P/E = 26.86
- InfoSpace, Inc.
- P/E = 10.48
I really enjoy using creativity tools so I decided to use a tool called S.C.A.M.P.E.R to create some new ideas for my blog. The acronym S.C.A.M.P.E.R stands for substitute, combine, adapt, modify, put to another use, and rearrange. Basically, this tool is a checklist of idea-spurring questions. S.C.A.M.P.E.R was made popular in the book Thinkertoys by Michael Michalko.Here is how I used it -I started out by asking myself the following question:“In what ways might I improve my blog?”Investors look for stocks that will generate the highest returns on their investment (ROI). One method of determining the value of a firm's common stock is to calculate its Price/Earnings (P/E) ratio and then compare it to the P/E ratio of the market (S&P 500) and/or its peers. The P/E is calculated by taking the market price per share of common stock and dividing it by the earnings per share (EPS) over the past 12 months.
P/E Ratio = Market price per share/Earnings per share
P/E is one market value ratio that is widely used and easily attainable from any financial publication. P/E must be used carefully when evaluating companies in different sectors. The average P/E in the technology sector is much higher than the average P/E in the utilities sector. It would be difficult to compare these 2 sectors utilizing P/E alone. It would be an incorrect assumption to believe that InfoSpace, Inc. is comparable to companies in the utilities sector because they share similar P/E's.
Technology Sector (Example: P/E Average 36.93)
- Google Inc.
- P/E = 73.44
- Yahoo! Inc.
- P/E = 26.86
- InfoSpace, Inc.
- P/E = 10.48
Mr. and Mrs. Buyer have just seen a listing photo of a house that's right up their alley. It seems to have the features they want, and it's within their price range. Now, continuing in the process, they read the details. They read what you've written to describe the house.This is when the quality of your listing language either moves them forward, or drops them off.The first parts of the listing are easy to write, and they're often enough to get a buyer to come out for a visit. Number of bedrooms. Square feet. The basics.But your g
P/E Ratio = Market price per share/Earnings per share
P/E is one market value ratio that is widely used and easily attainable from any financial publication. P/E must be used carefully when evaluating companies in different sectors. The average P/E in the technology sector is much higher than the average P/E in the utilities sector. It would be difficult to compare these 2 sectors utilizing P/E alone. It would be an incorrect assumption to believe that InfoSpace, Inc. is comparable to companies in the utilities sector because they share similar P/E's.
Technology Sector (Example: P/E Average 36.93)
- Google Inc.
- P/E = 73.44
- Yahoo! Inc.
- P/E = 26.86
- InfoSpace, Inc.
- P/E = 10.48
There are many important elements to the creation of any new business, but the mission statement is perhaps the most critical.After all, it is the mission statement which sets the tone for the business and tells the world what the operation is all about. Fortunately for the new business owner, there are many places where a sample mission statement can be found.Books Devoted To Business PlanningFor instance, it is often possible to find a sample mission statement in one of the many books devoted to the world of business and
Technology Sector (Example: P/E Average 36.93)
- Google Inc.
- P/E = 73.44
- Yahoo! Inc.
- P/E = 26.86
- InfoSpace, Inc.
- P/E = 10.48
Advertisers that are beginning to focus on the young Hispanic market have been given a gift in the form of Latino television programming. Now mind you it’s not your typical Latino television programming that you would find on Univsion, this programming is geared towards the large and most overlooked demographic, U.S. born Latinos.Advertisers crave the buying power of the Hispanic market, the largest minority group in the United States today. But the problem is that they are limited in their knowledge of the Latino community. While they are looki
Technology Sector (Example: P/E Average 36.93)
- Google Inc.
- P/E = 73.44
- Yahoo! Inc.
- P/E = 26.86
- InfoSpace, Inc.
- P/E = 10.48
My personal favorite example of taking a lemon and making lemonade comes from the early days of Wal-Mart, long before they became The World's Largest Retailer.The LemonOur story begins at an early Wal-Mart store, located in an economically depressed region. The store gained the dubious distinction for having the largest inventory shrinkage rate of all their stores. Shoplifting was rampant.Squeezing The LemonDesperate for a solution,
- Google Inc.
- P/E = 73.44
- Yahoo! Inc.
- P/E = 26.86
- InfoSpace, Inc.
- P/E = 10.48
- Pacific Gas & Electric Corp.
- P/E = 16.33
- The Southern Company
- P/E = 15.84
- FPL Group, Inc.
- P/E = 16.27
As an investor, it is prudent to select an industry in which you have extensive knowledge. Search engines for example, is a competitive field; Google and Yahoo! lead the category. P/E is a great tool to compare these two companies. Both companies have large advertising units that generate the majority of their sales. Yahoo! has several other revenue generating properties and services that help Yahoo! to weather changing advertising trends. However, Google owns a larger share of the search traffic: 42.3% v. Yahoo!'s 36.3%, as of March 2006.
Looking strictly at the price/earnings ratios of Yahoo! and Google is a good way to compare these two companies. Yahoo!
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