P/E ratio is one of the most commonly used indicators to evaluate whether the stock price level is reasonable.
Static P/E ratio = market price per share/annual earnings per share
Price-earnings ratio level:
0- 13: the value is underestimated.
14-20: that is, the normal level.
2 1-28: The value is overvalued.
28+: Reflecting the existence of a speculative bubble in the stock market.
Influencing factors of P/E ratio:
1. P/E ratio is closely related to the company's industry. For example, the price-earnings ratio of the leading stocks in the electronic information industry is as high as 150 times, and the price-earnings ratio of the steel sector often hovers around 10 times.
2. The P/E ratio is influenced by the size of equity and stock price. The smaller the share capital, the more popular the stock is, and its market positioning and price-earnings ratio are higher.
3. The high growth of the company has a significant impact on the P/E ratio. The better the company's future prospects, the higher its growth, the higher its share price and the higher its P/E ratio.
P/B ratio:
P/B ratio = current share price/net value per share
The lower the P/B ratio, the higher the investment value. On the contrary, its investment value is small, but when judging the investment value, we should also consider the market environment at that time, the company's operation and profitability.
P/B ratio does not apply to short-term speculation. Stocks with a P/B ratio lower than 1 may not rebound immediately, nor may they stop falling below their net assets. There must be internal reasons for being lower than their net assets.
Marketing price:
Sales rate = total market value/main business income
Total market value = current share price × total share capital
The lower the marketing rate, the greater the value of stock investment. The stock selection index system combining low marketing rate and low P/E ratio can obtain obvious excess returns.
These can be understood slowly. The most important thing in stock trading is to master certain experience and skills, so as to make accurate judgments. Novices don't use Anniu Jiabao's mobile phone to track the cattle people inside when they are not sure, which is much safer. I hope I can help you, and I wish you a happy investment!