price-earnings ratio

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price-earn·ings ratio

(prīs′ûr′nĭngz)
n.
The ratio of the market price of a common stock to its earnings per share.
American Heritage® Dictionary of the English Language, Fifth Edition. Copyright © 2016 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

price-earnings ratio

n
(Stock Exchange) the ratio of the price of a share on a stock exchange to the earnings per share, used as a measure of a company's future profitability. Abbreviation: P/E ratio
Collins English Dictionary – Complete and Unabridged, 12th Edition 2014 © HarperCollins Publishers 1991, 1994, 1998, 2000, 2003, 2006, 2007, 2009, 2011, 2014

price′-earn′ings ra`tio


n.
the current price of a share of common stock divided by earnings per share over a 12-month period, often used in stock evaluation. Abbr.: p/e
[1960–65]
Random House Kernerman Webster's College Dictionary, © 2010 K Dictionaries Ltd. Copyright 2005, 1997, 1991 by Random House, Inc. All rights reserved.
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He also states that given how price earnings ratios are indicative of earnings growth, they are thereby correlated to expected investor returns (as measured through ROE).
The correction has seen price earnings ratios in the region are now largely in line with western markets and that is attracting increasing interest from the US according to the Bank of New York Mellon vice-president Mahmoud Salem.
With more of the same expected this year and next, many stocks have price earnings ratios that make them good targets for ''value'' investors.
At the other end of the spectrum, public companies have seen their average price earnings ratios fall from an average of 18.2x in 2004 to 14.4x this year.
``If you look at the way the price earnings ratios have dropped back we are now at a stage where you can argue that things are sustainable,'' he said.
Stocks selected must have substantial upside potential based on expected earnings applied to reasonable price earnings ratios. The expected upside determines the "sell target." Another description of value investing is "price-driven," and price discipline applies both to the purchase price and the target sell price.
This offers good investment opportunities." "With price earnings ratios averaging 16.5 these are cheap valuations for an emerging market," he added.