What is PE and EPS Ratio?
Hi,I am new to share trading. I own just started to buy shares. Can you let somebody know me detail about PR and EPS? How it can comfort to take finding to buy share? Please give example also. Thank you.
Answers: PE stands for the Price/Earnings ratio, which explains how expensive a stock is. A $10 may be more expensive than a $50 stock because you are paying more for $1 of returns. For example, the $10 stock is earning $0.50 per share (that's EPS = Earning Per Share) so its PE ratio is 20. The $50 stock is earn $5 per share so its PE ratio is 10. Therefore you are paying less for one dollar of income, and your return is greater.
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Why is the EPS 20 for the $10 stock? Because investors have complex expectations for future returns growth and they bid up the price. The $50 stock may be a stable company that will not grow much in the adjectives.
PE (Price / Earnings Multiplee) is the ratio that helps to add the relation of the Price of the company quoted in the stock marketplace vis a vis the Earning figure of the company.
Where as, EPS (Earnings Per Share Ratio) is the ratio which is for the Shareholder to know what in truth the price per share is as per the books of the company. EPS is required to divide the PE Multiple. It indicates how much times the markets are expecting the company to grow from hereon.
Details subsequent on for the time being solely this much.
Thanks
Regards
Vinay
How the stock price vil move upward n downward, wht are the main factors for the movement?
Answers: The stock price actually reflects the perceived value of the company. The upward and downward movement of the stock is due to changes in that perception. As companies have good news/earnings/sales/revenues figures released, it sends a stock higher. It happens in reverse for bad news. These items create a bigger impact on stock price. External environment issues also have a impact, although usually a smaller impact. External environment factors can include politics, fuels costs, economic data and so on.
Market sedament. supply and demand.
anouncements
so many factors it's rediculous. there's people with huge money funds that influence it by selling or buying big amounts. good / bad news reports regarding the company can influence it's movement. good / bad news reports regarding almost anything (economy/ terrorism/ elections/ anything) can influence an individual stocks or the markets direction. It's pretty much a crapshoot.