A question about the PEG (price earning growth).

[#1]

Hehehe, unless you can "PEG" down what the companies profits are going to be next year, everything else is a best guess. Not sure that doing 50 million calculations will help you. One small mistake and the PEG, PE and everything else flies right out the window. But, if you like doing all thses calculations, then do it and never mind my comments.

[G_V_V]

That is what risk means. Who knows what tomorrow will bring, will the sun rise or not?

[G_V_V]

OK you got a very true point here.

[louisg]

If the growth rate is removed, then quite obviously B is the better investment no matter what the time frame. However, one should not be using the PEG ratio as an investment tool if there is no growth rate to consider. G = growth.

[G_V_V]

What do you think is the range difference of initial investment returns between two companies where one company has a PEG of 1 and the other .8 in percentage over a 10 year span, all things being equal? What will your R100,000 invested in both companies be worth including dividend?

[G_V_V]

I did not mean to remove the growth rate in company A but just be remove the confusion around it because 10% growth to a 10% earning is still no comparison to a company that doubles every year.

[G_V_V]

However is there really a big difference when a company is running neck and neck with another company, it is not as if the winner takes all as in a horse race. I asked skaapjop the question below regarding the two companies running neck and neck. Depending on the answer will show the value of the PEG.

[#8]

I'm willing to bet it will rise. Will you take my bet?

[G_V_V]

LOL, you have nothing to loose if it does not?