Value Investing the best strategy especially when markets are volatile like present scenario, some people say that complete avoid volatile market, some people will say choose the best companies in volatile market, Unlike Bull markets we can’t take risk and invest in all type of stocks, it’s best time to choose undervalued stocks,
But when we discussed about undervalued stocks so many might not know how to find the undervalued stocks, some people will use P/E ratio, but it has it own limitations we cant use P/E ration to compare the companies across different sectors, so if you are looking for one ratio which you can use across different stocks then you got the one , that is called PEG ratio.
You can calculate PEG ration using Price to Earning and EPS Growth , the companies which are having less than 1 are undervalued stocks, and there are some limitation also if the PEG Ration is greater one means, don’t think like,these companies you should avoided, it should not be only criteria to select the stocks, But in current market condition you will get more such type of undervalued stocks, you can consider those for investing.
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