please explain how to judge a share with a 39.2 EY and 2.55 PE. what outside factors are to be considered as to determine the true value/ sentiment of a share besides the cap of the share. and would the above figures be healthy(because they look good to me)? the share is currently sitting at 40c
PE and EY -he one is just the inverse of the other.Either should be used as a measure against similiar companies or the market as a whole.A low PE could be good or bad it could mean that investors see low earnings growth for this company in the future or the share has been hammered unfairly by the market. Difficult to answer your qustion as pe or ey are one measure but you have to look at more than that to determine value ie latest financials/fundamentals and technicals they all tell a story. I stay away from shares less than r10 mv. normally not much liquidity, high risk, and get hammered the most in bearish markets.
Hi bobs all i mean is that i stay away from shares with a market value of less than R10 per share. The formula p=mxe where p(expected market price) = M(pe ratio) xe(expected earnings per share) is a probability formula to determine future value but thats to complicated for me i try to keep things simple.