Thread by @MarketLearner_

What's PEG ratio?
When to use it?
What does it tell?

Everything answered in this #Thread🧵

#StockMarket #Stocks #Investment #invest #Investing

@harrie007 @Ishan_Narayan_ @kaushaldarshan_ @mystock_myview @caniravkaria @kuttrapali26 @SmartSyncServ @mishika_chamria @suru27

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👉CLSA has flagged mean reversion as a derating risk for Indian equities.

👉A record valuation premium in equities as well as domestic bonds indicates low margin of safety.

👉A simple valuation mean reversion anchored on bond yields indicates fear of 30% in Nifty.

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👉About individual stocks in NSE500, 55% have current TTM PE higher than 5 year avg.

👉At high volatility & stretched valuations, PEG ratio can do good in quality stock selection as high PE stock can be a good bet if it is expected to report strong earnings growth.

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👉PEG ratio refines the standard PE multiple of a stock by including its projected earnings growth. It is calculated by PE/EPS growth.

👉Stocks with PEG ratios of less than 1 are considered undervalued, whereas those with ratios more than 1 are considered overvalued.

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I hope the thread was useful. Do you use PEG ratio in your stock selection process? Lemme know in the comments below.

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