Research tip of the week
PEG and im not talking about some peg board. PEG ratio is a stock's price/earnings ratio divided by its year-over-year earnings growth rate. In general, the lower the PEG, the better the value, because the investor would be paying less for each unit of earnings growth.
so what does all this crap mean? Basically all it means is the lower the number the more undervalued a stock is. When Im doing my research, I look for a PEG ration of between .5 to 1.5 but especialy between .5 and 1.0. This is means that if you were to purchase shares of stock in company x you will be getting them at a fair if not below fair value. Thats all for now. Happy hunting!
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