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Economics

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Hi
My three criterion are now, if the share is blue-chip or not, the companies PE and its comparison to the S&P/ASX200.

Regarding the companies I have compared it to a rival companies PE, I said that it is good that its PE is higher than the other company but it is still a bad reflection on the company as the PE is only 0.09. (Would that be 9cents?)

Is that correct?

  • Economics - ,

    Where did you find a PE of 0.09? Which company? I've never seen such a low PE.

  • Economics - ,

    Qantas Airways on the ASX

    My working out is below:
    Qantas Price Earnings Ratio =
    (Market Value per share)/(Earnings per share (EPS))
    2.08/(Earnings per share (EPS))
    Qantas EPS =
    (Company net income-dividends)/(Number of shares available)
    (417,000,000-0)/19,000,000
    $21.94
    Qantas Price Earnings Ratio =
    2.08/21.94
    $0.09

  • Economics - ,

    That came out badly

    Retype

    PE = Market value per share/EPS
    EPS = net income-dividends/no of shares available
    EPS = 417000000-0/19000000
    EPS = 21.94
    PE = 2.08/21.94
    PE = 0.09

  • Economics - ,

    I don't know what you did, but the P/E ratio is about 16 for Qantas. (That's within the range of most stocks.)

    Most financial sites show P/E.
    Price: 2.08
    EPS: 0.13

    2.08/0.13 = 16

    http://finance.yahoo.com/q;_ylt=AuuHd2GrepknzNvwLtScYYTxVax_;_ylu=X3oDMTFiMDA2NWVkBHBvcwMxMgRzZWMDeWZpU3ltYm9sTG9va3VwUmVzdWx0cwRzbGsDcWFuYXg-?s=QAN.AX

  • Economics - ,

    High P/E's (30 +) usually means that the price of the stock is pretty high. Investors believe that the stock's price will go a lot higher.

    Some industries (utilities) tend to have P/E's under 10, but it's unusual for other companies to have such low PEs.

  • Economics - ,

    Thank-you for all your help so far.

    How did you find the EPS? I think I messed up there..

  • Economics - ,

    Oh, I see, you got it off the website. I'm just wondering how I got the EPS so wrong.

  • Economics - ,

    I got it from the website, but I also divided the latest price by the year's earnings per share. That information is also on the website.

    You're welcome.

  • Economics - ,

    Thank-you for all your help XD

  • Economics - ,

    You're very welcome.

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