Put a line under Section 3 that will give the RV and the Projected PEG (Current PE/ Est EPS Growth Rate).
Please put a line under the SSG Plus Section 3 that will give the RV calculated as (Current PE/5-Yr Avg PE) and the Projected PEG calculated as (Current PE/ Est EPS Growth Rate). These are very important valuation measures.
Relative Value according to my old Stock Analyst manuals:
" Good value is present when the current P/E is less than the historical average P/E ratio. This is measured by dividing the current P/E by the average P/E (x 100) to produce a figure called the Relative Value...This is the best overall measure of the reasonableness of a current P/E multiple...Relative Value is a ratio that tries to show under and overvalued conditions."
PEG according to my old Stock Analyst manuals:
"If you can buy a stock when it’s current P/E is lower than its EPS growth rate (one of Peter Lynch’s criteria), you are getting good value…. This is a classic measure of growth stock valuation and a good final check against the appropriateness of other P/E valuation measures. T. Rowe Price was the first to use this figure in the 1950s. The standard is: “Are you paying a multiple either below or near the growth rate?” If it is more than 20% above the projected growth, you may be stretching to buy the stock…PEG = Current P/E/ EPS Projected Growth Rate…. Generally a ratio that is 150 or higher may indicate an over priced stock.”