Single-Digit P/E Ratios ยป financialsurfer.com

Single-Digit P/E Ratios

June 11th, 2009 | Category: Personal Finance

Low price/earnings ratios are usually easy to find, even when the broad market seems expensive. For example, the S&P 500-stock index has climbed more than 30% in three months and now trades at 22 times trailing earnings, well above stocks’ 137-year average trailing P/E of 15. Still, one out of every eight index members has a P/E in single digits. Not all low-P/E stocks are bargains, though. Modest valuations often mean earnings are expected to decline, and some declines suggest long…

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