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Cinderella’s slipper

Mr Bearbull

Mr Bearbull

So-called ‘PEG factors’ are popular as a rough-and-ready valuation tool that does a better job than the ubiquitous PE (price-to-earnings) ratio. Most likely that’s because PEG factors go one step further than PE ratios. To the ‘PE’ they add ‘G’, thus linking a stock’s conventional earnings-multiple rating with the growth in its earnings. In other words, they unify rating and growth in one number, which should be helpful and certainly brings brevity.

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