Peter Lynch

Stocks May be undervalued and there's chances of it growing , the threshold is 1.2 ... In this query I have applied the Peter Lynch Criterias 1) trailing PE should be less than 25 and forward PE should be less than 15 The Trailing P/E ratio (TPE) is calculated by dividing the current market price per share (P) by the earnings per share (EPS) over the previous twelve months (TTM - trailing twelve months). The formula for calculating the Trailing P/E ratio (TPE) is: � � � = � � � � � � � TPE= EPS TTM ​ P ​ Where: � P = Current market price per share � � � � � � EPS TTM ​ = Earnings per share over the trailing twelve months To calculate the EPS over the trailing twelve months, you sum up the earnings per share for each of the past four quarters. For example, if a company's earnings per share for the last four quarters were $2, $1.5, $1.8, and $2.2 respectively, you would add them together to get the total earnings over the trailing twelve months and then divide by 4 to get the average EPS over the period. Let's say the total EPS is $7.5. Then, if there are no changes in the number of shares outstanding, the EPS for the trailing twelve months would be $7.5. The Forward P/E ratio (FPE) is calculated by dividing the current market price per share (P) by the estimated earnings per share (EPS) for the next twelve months. The formula for calculating the Forward P/E ratio (FPE) is: � � � = � � � � � � � FPE= EPS est ​ P ​ Where: � P = Current market price per share � � � � � � EPS est ​ = Estimated earnings per share for the next twelve months The estimated earnings per share for the next twelve months can be obtained from various sources such as analyst forecasts, company guidance, or consensus estimates. These estimates are projections of the company's future earnings based on factors such as industry trends, economic conditions, and company-specific factors.EPS stands for Earnings Per Share. It is a financial metric that represents the portion of a company's profit allocated to each outstanding share of common stock. It is calculated by dividing the company's net income (after taxes and preferred dividends) by the total number of outstanding shares of common stock. The formula for calculating Earnings Per Share (EPS) is: � � � = � � � � � � � � � − � � � � � � � � � � � � � � � � � � � � � � ℎ � � � � � � � � � � � � � � � � � � � � � � � � � ℎ � � � � � � � � � � � � � � � EPS= Weighted Average Number of Common Shares Outstanding Net Income−Preferred Dividends ​ Where: Net Income is the company's total profit after taxes and other expenses. Preferred Dividends represent the dividends paid to preferred shareholders, if any. Weighted Average Number of Common Shares Outstanding refers to the average number of shares outstanding during the specified period, takinginto account any changes in the number of shares outstanding over time. The PEG ratio, or Price/Earnings to Growth ratio, is a valuation metric that compares a company's Price-to-Earnings (P/E) ratio to its expected earnings growth rate. It helps investors assess whether a stock is fairly valued relative to its earnings growth potential. The formula for calculating the PEG ratio is: � � � � � � � � = � / � � � � � � � � � � � � � � � � � � � � � � � � � ℎ � � � � PEG ratio= Annual Earnings Growth Rate P/E ratio ​ Where: P/E ratio is the Price-to-Earnings ratio, calculated as the current market price per share divided by the earnings per share (EPS). Annual Earnings Growth Rate represents the expected annual growth rate of the company's earnings. This can be the historical growth rate or the estimated future growth rate. The PEG ratio is typically interpreted as follows: A PEG ratio of less than 1 suggests that the stock may be undervalued relative to its earnings growth potential, indicating that investors are paying less for each unit of earnings growth. A PEG ratio of greater than 1 may indicate that the stock is overvalued relative to its earnings growth potential, suggesting that investors are paying more for each unit of earnings growth. A PEG ratio of around 1 suggests that the stock is fairly valued relative to its earnings growth potential.

by Siva