Annoyingly I can’t remember where I heard it, but a PE ratio of between about 14 and 21 is seen as generally the ideal for a company, it means that the share price suggests reasonable confidence in the company while at the same time not being over-valued. However, as it says in Neil’s comment, PE ratio can be misleading and is not to be taken as gospel to the isolation of everything else. A low PE ratio could mean either that a company has great potential for growth, or it could mean it’s going to perform poorly. Similarly, a higher PE ratio doesn’t necessarily have to mean that the company is over-valued. Amazon’s 45 PE ratio and Tesla’s 95 are high due to the fact they are popular and people want to buy that stock more than the stocks of other companies with more reasonable ratios.
You’ll find that industries have different P/E that they’ll be judged against. You can see simply Wall Street include market and industry P/E in their stock analysis, in this example it’s apple.
Ah ha, interesting, I didn’t even know there was a different market and industry PE Ratio - thank you.
I wonder if the 14-21 as the rough ideal still fits as a general rule? It seems to for both with Apple in this example.
Not so much. Banking trades on a low P/E simply Wall Street has UK banking at 4.6x
16 posts were split to a new topic: When is the right time to sell?
Hi there! This is my first question on this community page. It’s not so much a question re share trading in general but more about Freetrade itself. Could you point me in the direction where to find updates on what the Freetrade team are planning for the future? Things like a possible series C or launching in the US market. Cheers and thanks a lot!
Sorry Andre not an answer here just another question.
Coming out of a weekend do you set your buy orders to execute as soon as the markets open or do you avoid doing this and wait an hour or two to see any volatility settle?
Does it even matter?
And for the most part do you use limit orders or just go for current stock price if you are happy with it?
If ex dividend day has happened, and funds have been set aside, when is payment made to us?
Payment day: e.g. for Lloyds the Interim 2022 payment, which went ex dividend on August 4 2022, will be paid on Monday September 12 2022.
I use Dividend Max to check the dates - but be aware they do sometimes change.
If you set a buy order it won’t go through until 10am, which is the reason I rarely use it. I tend to wait for the markets to open and then wait 30 minutes and see what’s happening and then just place an instant order if the price is looking right.
I’ve usually done a bit of research and been watching the stock I’m interested in for a while, so I have an idea of the price I want it for.
Hope that helps!
It does thanks
Hi folks, I too have $LGEN but at a guess, not as many as you guys lol (105) so is it worth increasing this pot to keep long term or just sit on this amount? daft question I know but someones gotta ask it
Only you can decide whether it is worth increasing your holding or not. It is not a good idea to request or take advice from strangers on the internet about which investments to buy or sell. Your personal circumstances and investment philosophy should help you decide what and how much to buy, hold and when, if ever, to sell.
Thanks for the advice. yeah I wouldn’t base my reasoning on strangers comments, was just a general question. Always a learning curve this trading lark
Obviously not advice, but I have a holding in Legal and General as well, 120 shares. I’m lucky enough to have a lowish average of £2.55 per share which is both a blessing and a curse as I’ll explain below.
As a dividend investor, I’m primarily interested in the dividend (not surprisingly) and looking forward to receiving payment in September. While my current gain is almost double the dividend yield, I probably wouldn’t really consider selling what I see as such a solid stock unless it went well over 20% as my objectives centre mostly on the long term and the dividends rather than growth per se.
Why is this also a curse? Well, with ex-dividend date being Thursday, I would probably like to have bought more but having had a gain of over 11% means that buying more will worsen my share average. Not necessarily a disaster of course, but I try not to do that.
So, the point of my ramble?
Well probably a less elegant way of repeating what Bitflip said, what you want to do will depend on your objectives. As a dividend investor, now isn’t my time to sell these. As someone looking long team, I’m also not inclined to sell. Having a low share average means I probably won’t buy more at this point. If you are a growth investor or have other less long term objectives in mind, for example if you want to use the money now for what you think might be an even better stock, then your view may be different.
Thanks @1anrs, very much appreciated on the reply. Yes this is only a “hobby” as I use other avenues for very long term planning. This account is more for Dividend hunting and holding decent companies that will do this.
All a learning curve so getting use to EPS, P/E etc, even down to reading the full reports before I buy shares.
Thanks again and look forward to the Divi
LGEN is part of my dividend income portfolio so I’ve never paid attention to its share price. It appears that my average is £2.33 a share and I’m sitting on a gain of 22%.
I won’t be selling anyway, just buy a few more when I get paid dividends.
Not sure i understand your thinking @1anrs.
Lowering or raising your average is pretty well irrelevant. Its just numbers on a page. If its cheap its a buy. Just because it is higher than your first purchase is definitely not a reason not to buy more. I recently bought more at 242. I also have legal and general at 166.06p. 242p was still a bargain.
If you are hoping to buy more below your average you might be living in hope.