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QuestionsCategory: Stock ScreeningAverage PE Ratio
XIANGYU YANG asked 4 years ago

Hi Victor/Rusmin,
Just have a question. You mentioned in one of your videos on how to value Large-cap companies.
You mentioned that we can find the average PE Ratio of the company and compare it with its current PE Ratio. If the current PE ratio is below the average PE ratio, it may be a good time to purchase the stock.
Just want to clarify, is my understanding of what you have have said correct?

1 Answers
Victor Chng answered 4 years ago

Hi Xiang Yu,
 
Yes you are right but you have to make sure that the large cap company is a predictable business then you can use the PE ratio.