What Are Undervalued Stocks?
The so-called low valuation means that the stock's stock price is lower than the market's overall price-earnings ratio or the industry's price-earnings ratio and is undervalued. It should be higher than the existing stock price, and it will be safe to buy. Such stocks are generally the long-term choice.
Undervalued stocks
discuss
- Chinese name
- Undervalued stocks
- Features
- Low P / E ratio and low P / B ratio
- Selection criteria
- P / E ratio is less than 30 times, and P / B ratio is less than 3 times
- Suitable for
- Generally preferred for long-term
- The so-called low valuation means that the stock's stock price is lower than the market's overall price-earnings ratio or the industry's price-earnings ratio and is undervalued. It should be higher than the existing stock price, and it will be safe to buy. Such stocks are generally the long-term choice.
- Screening method
- Low valuation stocks, first of all, the low price-earnings ratio, and secondly, the low price-to-book ratio. My selection criteria is that the price-to-earnings ratio is less than 30 times and the price-to-book ratio is less than 3 times. The company's gross profit margin is relatively high in the peer industry, depending on whether the company's performance can increase, whether there are new projects put into operation in the next few years, and whether it will bring a significant increase in the company's performance. Basically, it is an undervalued stock. According to the above criteria, I think that China Coal Energy under 10 yuan is quite undervalued, so I can buy some recent profits.
- There is also a key point. When examining the company's price-earnings ratio, it is not simply based on the most recent quarterly report or annual report, but a comprehensive analysis.Some companies may encounter policy factors or other sudden factors leading to sudden or large increases in performance For example, some companies transferred an asset, and the investment income was very high, and the earnings per share suddenly became very high.Other companies because of national policy factors, such as power stocks, have been in the last two years because the country has liberalized coal prices. Restricting electricity prices has led to a serious decline in performance. These must be comprehensively analyzed, and you cannot simply look at the statements for this quarter and year to calculate the price-earnings ratio.