The center white line represents the mean price ratio over the past two years.
Now oil is again outside the oil-gold price ratio band, slightly, and this time to the other side.
In the chart below, the potential for profit can be identified when the price ratio hits its first or second deviation.
When the oil-gold price ratio is outside that box, something is askew.
Oil-Dri Corp. ( ODC) showed up in the results of my value screening strategy. (The strategy is highlighted in the July AAII Journal First Cut column.) ODC trades at a price-earnings ratio of 17.0 and a price-to-book ratio of 1.7.
Finally, I set the valuation limits at a maximum price-to-book ratio of 4.0 and a maximum price-earnings ratio of 25.0.
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The price earnings ratio for the market approximates 12 times earnings on our conservative estimates.
Not quite as good but a better price performance ratio than the now more expensive palladium.
Is a slow growth at best U.S. economy worth a 15 times price earnings ratio for this stock market?
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The price earnings ratio for the Russell 2000 small-cap benchmark today stands at approximately 12.6x versus its long-term average of 15.4x.
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The impact of a slow or no growth economy has to be a decline in the price earnings ratio of U.S. stocks.
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Its price-sales ratio is 27% below its 3.5 average since 2008, and the discount to its five-year average price-to-book value ratio is 31%.
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Finally, Dominion shares are cheaper than those of other utilities now, with a price earnings ratio much lower than its shares normally trade.
The price earnings ratio represents what investors are willing to pay for the stock compared with what they can expect to receive in dividends.
Its forward price earnings ratio to 2011 earnings estimates is 12.6.
Take for example how attractive small-caps have become: the price earnings ratio for the Russell 2000 small-cap benchmark was recently 12.6x versus its long-term average of 15.4x.
If you believe forward estimates are too aggressive, the trailing price earnings ratio (based on what these companies have already earned) is 14.6x, compared to a 15-year average of 26.7x.
All things being equal, a low price-to-sales ratio is good news for investors, while a very high price-to-sales ratio can be a warning sign.
Valuation compared to its projected five-year growth rate is also modest: Limited's PEG ratio (price-to-earnings ratio divided by long-term growth rate of 15%) is 0.96.
The Price to Book ratio is a formula that represents the most recent share price of a company compared to its book value per share (the residual dollar value for common shareholders after assets are liquidated and all debtors are paid).
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In comparing drug companies (or software or chip or computer companies), you can look not only at the ratios of price-to- earnings but also at the ratio of price-to-innovation-adjusted earnings.
With a price-to-earnings ratio of 23.10 and a growth rate (based on the average of the three-, four- and five-year historical EPS growth rates) of 24.14%, Hasbro has a price-to-earnings-growth ratio 0.96.
It also sports a 37% discount to its average price-sales ratio over the past five years.
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The stock is now trading at a robust price to earnings ratio of 70.
Macronix's price-earnings ratio for forecasted 2002 is only 19, compared with 50 for Intel.
Many use a dividend discount model, but I prefer the straight price-earnings ratio yardstick.
Similarly, with WaMu, Buckingham notes the 4% dividend yield and price to earnings ratio of 9.3.
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