Saturday, 15 February 2014

大家对 PE Growth (PEG) 的交流与见解 (2) [白天去上学,夜晚建管道 by 夜孩子]

作者:欧贝亚
日期:11/6/2010

读一本peter lynch的书會對PEG比較有瞭解。

Pick Stocks Like Peter Lynch

Move Over P/E, Make Way For The PEG




In the early 1980s, a young portfolio manager named Peter Lynch was becoming one of the most famous investors in the world, and for a very understandable reason – when he took over the Fidelity Magellan mutual fund in May of 1977 (his first job as aportfolio manager), the assets of the fund were $20 million. He proceeded to turn it into the largest mutual fund in the world, outperforming the market by a mind-boggling 13.4% per year annualized! 

Lynch accomplished this by using very basic principles, which he was happy to share with just about anyone. Peter Lynch firmly believed that individual investors had inherent advantages over large institutions because the large firms either wouldn't or couldn't invest in smaller-cap companies that have yet to receive big attention from analysts or mutual funds. Whether you're a registered representative looking to find solid long-term picks for your clients or an individual investor striving to improve your returns, we'll introduce you how you can implement Lynch's time-tested strategy.

The Lynch PhilosophyOnce his stellar track record running the Magellan Fund gained the widespread attention that usually follows great performance, Peter wrote several books outlining his philosophy on investing. They are great reads, but his core thesis can be summed up with three main tenets: only buy what you understand, always do your homework and invest for the long run. (To see our review of one of Lynch's books, check out Ten Books Every Investor Should Read.) 

1. Only Buy What You UnderstandAccording to Lynch, our greatest stock research tools are our eyes, ears and common sense. Lynch was proud of the fact that many of his great stock ideas were discovered while walking through the grocery store or chatting casually with friends and family. We all have the ability to do first-hand analysis when we are watching TV, reading the newspaper, or listening to the radio. When we're driving down the street or traveling on vacation we can also be sniffing out new investment ideas. After all, consumers represent two-thirds of the gross domestic product of the United States. In other words, most of the stock market is in the business of serving you, the individual consumer - if something attracts you as a consumer, it should also pique your interest as an investment. 

2. Always Do Your HomeworkFirst-hand observations and anecdotal evidence are a great start, but all great ideas need to be followed up with smart research. Don't be confused by Peter Lynch's homespun simplicity when it comes to doing diligent research – rigorous research was a cornerstone of his success. When following up on the initial spark of a great idea, Lynch highlights several fundamental values that he expected to be met for any stock worth buying:
  • Percentage of Sales: If there is a product or service that initially attracts you to the company, make sure that it comprises a high enough percentage of sales to be meaningful; a great product that only makes up 5% of sales isn't going to have more than a marginal impact on a company's bottom line.
  • PEG Ratio: This ratio of valuation to earnings growth rate should be looked at to see how much expectation is built into the stock. You want to seek out companies with strong earnings growth and reasonable valuations - a strong grower with aPEG ratio of two or more has that earnings growth already built into the stock price, leaving little room for error. (To read more, see How The PEG Ratio Can Help Investors and Move Over P/E, Make Way For The PEG.)
3. Invest for the Long Run Lynch has said that "absent a lot of surprises, stocks are relatively predictable over 10-20 years. As to whether they're going to be higher or lower in two or three years, you might as well flip a coin to decide." It may seem surprising to hear such words from aWall Street legend, but it serves to highlight how fully he believed in his philosophies. He kept up his knowledge of the companies he owned, and as long as the story hadn't changed, he didn't sell. Lynch did not try to market time or predict the direction of the overall economy.

In fact, Lynch once conducted a study to determine whether market timing was an effective strategy. According to the results of the study, if an investor had invested $1,000 a year on the absolute high day of the year for 30 years from 1965-1995, that investor would have earned a compounded return of 10.6% for the 30-year period. If another investor also invests $1,000 a year every year for the same period on the lowest day of the year, this investor would earn an 11.7% compounded return over the 30-year period.

Therefore, after 30 years of the worst possible market timing, the first investor only trailed in his returns by 1.1% per year! As a result, Lynch believes that trying to predict the short-term fluctuations of the market just isn't worth the effort. If the company is strong, it will earn more and the stock will appreciate in value. By keeping it simple, Lynch allowed his focus to go to the most important task – finding great companies. (To learn more about value investing, see Warren Buffett: How He Does It and What Is Warren Buffett's Investing Style?)

Lynch coined the term "tenbagger" to describe a stock that goes up in value ten-fold, or 1000%. These are the stocks that he was looking for when running the Magellan fund. Rule No.1 to finding a tenbagger is not selling the stock when it has gone up 40% or even 100%. Many fund managers these days look to trim or sell their winning stocks while adding to their losing positions. Peter Lynch felt that this amounted to "pulling the flowers and watering the weeds". (For more information, read Achieving Better Returns In Your Portfolio.) 

ConclusionEven though he ran the risk of over-diversifying his fund (he owned thousands of stocks at certain times), Peter Lynch's performance and stock-picking ability stands for itself. He became a master at studying his environment and understanding the world both as it is and how it might be in the future. By applying his lessons and our own observations we can learn more about investing while interacting with our world, making the process of investing both more enjoyable and profitable.
It is common practice for investors to use the price-to-earnings ratio (P/E ratio or price multiple) to determine if a company's stock price is over or undervalued. Companies with a high P/E ratio are typically growth stocks. However, their relatively high multiples do not necessarily mean their stocks are overpriced and not good buys for the long term. 

TUTORIAL: Understanding the P/E Ratio
Let's take a closer look at what the P/E ratio tells us: 

P/E Ratiop/e ratio


There are two primary components here, the market value (price) of the stock and theearnings of the company. Earnings are very important to consider. After all, earnings represent profits, and that's what every business strives for. Earnings are calculated by taking the hard figures into account: revenue, cost of goods sold (COGS), salaries, rent, etc. These are all important to the livelihood of a company. If the company isn't using its resources effectively it will not have positive earnings, and problems will eventually arise. Learn more about how to use the price-to-earnings ratio to reveal a stocks real market value. Read Profit With The Power Of Price-To-Earnings.)

Besides earnings, there are other factors that affect the value of a stock. For example: 

  • Brand - The name of a product or company has value. Established brands such as Proctor & Gamble are worth billions. 
  • Human Capital - Now more than ever, a company's employees and their expertise are thought to add value to the company. 
  • Expectations - The stock market is forward looking. You buy a stock because of high expectations for strong profits, not because of past achievements. 
  • Barriers to Entry - For a company to be successful in the long run, it must have strategies to keep competitors from entering the industry. For example, most anyone can make a soda, but marketing and distributing that beverage on the same level as Coca-Cola is very costly.
All these factors will affect a company's earnings growth rate. Because the P/E ratio uses past earnings (trailing 12 months), it gives a less accurate reflection of these growth potentials.

The relationship between the price/earnings ratio and earnings growth tells a more complete story than the P/E on its own. This is called the PEG ratio and is formulated as: 

PEG ratio
*The number used for annual growth rate can vary. It can be forward (predicted growth) or trailing, and either a one- to five-year time span. Check with the source providing the PEG ratio to see what kind of number they use.


Looking at the value of PEG of companies is similar to looking at the P/E ratio: A lower PEG means the stock is more undervalued. 

Comparative Value
Let's demonstrate the PEG ratio with an example. Say you are interested in buying stock in one of two companies. The first is a networking company with 20% annual growth in net income and a P/E ratio of 50. The second company is in the beer brewing business. It has lower earnings growth at 10% and its P/E ratio is also relatively low at 15. (There are many other common ratios to use when comparing stocks, such as the P/S ratio. Learn more in How To Use Price-To-Sales Ratios To Value Stock.) 

Many investors justify the stock valuations of tech companies by relying on the assumption that these companies have enormous growth potential. Can we do the same in our example? 

Networking Company: 

  • P/E ratio (50) divided by the annual earnings growth rate (20) = PEG ratio of 2.5
Beer Company: 
  • P/E ratio (15) divided by the annual earnings growth rate (10) = PEG ratio of 1.5
The PEG ratio shows us that, when compare to the beer company, the always-popular tech company doesn't have the growth rate to justify its higher P/E, and its stock price appears overvalued. 

The Bottom LineSubjecting the traditional P/E ratio to the impact of future earnings growth produces the more informative PEG ratio. The PEG ratio provides more insight about a stock's current valuation. By providing a forward-looking perspective, the PEG is a valuable evaluative tool for investors attempting to discern a stock's future prospects.