Question : what does it mean when someone says a stock is trading XXX times its earnings?
Does this mean the P/E.Would a stock trading at 10 times its earnings have a P/E of 10?
- asked by Will O
All Answers:
Answer #1
Yes. You answered your own question.
- answered by quelisto
Answer #2
Yup that's the price/earnings ratio. You'll hearpeople talk quite a bit about the multiple thestock is trading it and that's the P/E ratio whichis what you're talking about. If a stock has aprice of $10 and is earning $1/share, then 10/1=10which is your PE multiple.
- answered by scrappymcfiesty
Answer #3
P/E of 10 means it will take you 10 years to getyour money back. It is calculated by dividing theearnings per share by the price pershare.Resources below that can help you get moreinfo on stocks and understand important stockselection criteria...and trader's blog - find outwhat others are doing.
- answered by Bear
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