How to Use P/E (Price to Earning Ratio) to time the investment into various stocks?
There is no direct answer and PE analysis to identify undervalued stocks is not the right answer too. Basics first (Some points to begin): P/E ratio is a commonly used financial metric that measures relationship between a company's share price with the earnings per share. It helps investors evaluate whether a stock is overvalued, undervalued or fairly valued based on its earnings performance. Trailing PE takes into account the Earnings of past 12 months(TTM PE) and may not account for future prospects and potential, while forward P/E is based on forecasted earnings in the next 12 months. This gives insights into market's expectations for the company's future performance. Symbol P/E ratio is computed considering consecutive four quarters Net Profit, issued capital and previous day closing price of the Company. Adjusted P/E ratio is computed considering consecutive four quarters Net Profit after adjustment of Exceptional items (net of tax), issued capital and previous day c...