EPS vs PER: Which is best?

both of them suck

>>1699965
Then what? When one buy stocks, you want to have an idea about the return of your stocks, dividend wise. Aren't these ratios giving relevant information about that?

>>1699960
P/e obviously. Who the fuck doesn't consider price? Do you think a stock selling at a 100 and earning 5 is better than a stock selling at 10 and earning 2?

>>1699968
yes and also the pe ratio is a good enough indicator if a stock is overpriced or underpriced.

two ways to gain money on a stock, either as dividend or as a stock price positive change and sell.

if you wish to hold long term pe is more important than actual price and expected change.

>>1699960
PE rates are worthless
just evaluate a company via fundamentals and you will have a sound analysis

>>1700027
There's no such thing as a stock being overpriced or underpriced. The price of a stock always reflects its true value.

>>1699960
EPS = net income / average outstanding common shares

>>1700382

thread over folks

stick to fundamental analysis and pick shares of companies who are doing good business

Pe / growth rate of earnings or PEG ratio is probably best . A company can have a higher pe but if it's earnings are increasing at a high rate then the high pe is ok.

>>1700423
while this is true it is also very wrong. if you accept the markets judgement on price of a stock so be it, but that doesn't mean you will profit from buying it.

stock is under priced when P/E ratio is under 10 but that could also mean the company is shit and going to tank according to the investors, and there could be an awesome business highly rated by the market that will not be profitable for shareholders for decades (kinda like tesla)

>>1699968

Real men use big boys ratios like EV/EBIT, ROIC, and EV/FCF.

P/E doesn't take leverage into account.

>>1702218
>P/E doesn't take leverage into account.
what do you mean by this? what is leverage in the context?

>>1702252

debt

P/E ratios are highly misleading because you can have the same P/E and ROE ratio for two companies with vastly different leverage profiles. The first company could have no debt and be very safe and the second company could be debt ridden and be very risky, but you wouldn't know about it just from looking at P/E or ROE.

EV (=enterprise value) solves that problem by adding debt and substracting cash from the market cap (and a few other things like pension liabilities, minority interests etc..).

EBIT is net income with taxes and interest payments added back.

FCF is free cash flow. Cash flows give you a picture of how much cash goes in and out of a company. This is important to pay attention to because companies can screw around less with cash flow statements than they can with income statements.

(normalized) Free cash flow is the cash flow that is left after maintenance capital expenditures have been paid from operating cash flow. FCF tells you how much cash can safely be taken out of the business (which can go to M&A, buybacks, dividends, growth capEx) each year.

>>1700423
Then why did the tech bubble happen

>>1702192
>I think I know the value of a company better than a bunch of Math PhDs with supercomputers

>>1699960
>nigger.png

>>1702877

Whoever wrote this knows his shit. Screencap it