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How to I calculate the average P/E of a particular industry?

In share market if PE ratio of any share is less then PE ration of that industry Is it good?

  • Answer:

    PE ratio of a company is reflection of that company’s earning and buyer's willingness ratio. It shows the interest of buyer, present earnings poor, but future is bright, price will hike PE as well. It is depended on numbers of variable, relation with Industry’s PE not that much significant.

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It's complicated ... much could be going on in terms of potential future problems, but going strictly by the fundamentals,next you should look at price times earnings growth( peg ) if the pe is lower than industry and its got good earnings growth in the future, than it's undervalued. If it is not growing earnings or earnings are shrinking then pe is low for a reason anticipating bad times to come.

PE ratio of a company is reflection of that company’s earning and buyer's willingness ratio. It shows the interest of buyer, present earnings poor, but future is bright, price will hike PE as well. It is depended on numbers of variable, relation with Industry’s PE not that much significant.

Zia

It's complicated ... much could be going on in terms of potential future problems, but going strictly by the fundamentals,next you should look at price times earnings growth( peg ) if the pe is lower than industry and its got good earnings growth in the future, than it's undervalued. If it is not growing earnings or earnings are shrinking then pe is low for a reason anticipating bad times to come.

dwight b

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