Look at the Price to Earnings (P/E) ratio to get a general idea of how the market values a stock. The P/E ratio is a measurement of a stock's price in relationship to company earnings. A high P/E ratio means that the market is paying a lot compared to what the stock is earning. A low P/E ratio means that the market isn't paying much in comparison to earnings. Don't read too much into a P/E ratio. Although this number can help you find a great stock before it is discovered by the rest of the market, it is no guarantee that a stock's price will rise or fall.

About LifeTips

Now one of the top on-line publishers in the world, LifeTips offers tips to millions of monthly visitors. Our mission mission is to make your life smarter, better, faster and wiser. Expert writers earn dough for what they know. And exclusive sponsors in each niche topic help us make-it-all happen.

Ask a Question

Not finding the advice and tips you need on this Investing Tip Site? Request a Tip Now!

Guru Spotlight

Byron White

Ever wonder how you could make your life better and more fun? So have tens of millions of fans who have turned to LifeTips for answers over the past decade. We keep the tips, advice, books, podcasts and writing services flowing, so you can keep your life and business growing in the right direction. Upward!