Session 15: PE Ratios

Look at the determinants of PE ratios and how to use them in comparisons across time, markets and companies.

[@dylanjhirt]

My mouth was literally open at the end when he pulled out the regression model. Thanks for making PE interesting again, you reignited a kindling professor, thanks

[@rajvaswani7878]

Like always a pleasure watching your videos professor, be it something as simple as P/E ratio, completely blown away. Reminds of an old quote, "The only true wisdom is in knowing you know nothing.” - Socrates.

[@sanketj1]

Prof. Aswath sir, you are simply awesome. Thanks for unleashing the true picture behind PEs..

[@xyemi]

Sanke

[@purudate4049]

Yes. It gives another point of view. However it hardly has any meaning or value for an equity investor. An ordinary investor does not have access nor expertize to use statistical techniques narrated in this video

[@carterazariah4000]

you all probably dont give a damn but does any of you know of a tool to log back into an Instagram account..? I was dumb lost my login password. I would love any help you can offer me

[@davianabel3381]

@Carter Azariah Instablaster :)

[@carterazariah4000]

@Davian Abel thanks for your reply. I found the site on google and im in the hacking process now. I see it takes quite some time so I will reply here later when my account password hopefully is recovered.

[@raffi3o3]

thank you for that in-depth view of PE

[@FRANKWHITE1996]

Sir! Youre true value here in the internet. Thanks

[@quant-trader-010]

This is gold!

[@ajgiliana]

Absolutely phenomenal course.

[@rameshbabunemani]

Excellent. Really the PE Ratio is explained in the most practical and professional way. Thank you very much sir.

[@daytrader384]

Thanks Sir. You are King of Valuation

[@vjlectureseries5420]

Wonderful explaination professor

[@JoaquinBS92]

Very good series of in depth analysis of the main relative valuation ratios. Love this part in your book as well. As professor explains, this method is just a good starting point previous a DFCF Valuation. Since relative valuation is a snapshot of the present conditions of the company, we have to keep in mind that the true way of delivering above average results is by anticipating (before "the market" does) events like turn arounds, regressions to the mean, margin improvements and growth rates; and for this, you need a story and project the future.

[@shivkuma100]

Professor, Excellent analysis and insight! Would you consider a few sectors and drilling down on P/E ratios vs DCF and giving insights into why certain sectors command the high PEs, despite low operating/net margins... It would be interesting the drivers of potential re-rating of P/E ratios of sectors. It may also be interesting to see if sectors with similar P/E ratios tend to share some operating or strategic characteristics. For cyclicals does sector P/E ratios across different times of the cycle illuminate anything about how the market sees beyond the cyclicality and prices residual sector risks?

[@OneForTheIrish18]

at 12:43 : there is no Hanson Natural on the table listed.

[@bolsaparaprincipiantes]

I thought I was going blind

[@arulasveen]

@@bolsaparaprincipiantes me too LOL. i paused and checked thrice...

[@alxndrmrphy]

This comment calmed me down. I thought I was starting to see things (or not see things) hahaha

[@humbleinvestor3770]

The problem with finding a perfect value stock is like finding a perfect date, a disappointing proposition. Why should a company with excellent growth prospects sell at a low multiple, it's a direct contradiction to the efficient market theory. P/E ratio is too narrow a metric to give a meaningful answer to the critical question of predicting future earnings of a company that Mr.Market really cares about.

[@yatingsun2186]

Hi Professor, may I ask how we can calculate historical P/E ratio? Should we use the average stock price in previous years or current stock price? Do you have any suggestion?

[@AlexVoxel]

I spent 5 min trying to find Hanson Natural lol

[@srivatsannarayanan4178]

is it i was listening to this for 4 times. thanks you explained

[@otomackena7610]

Legend has it that some people are still searching for Hanson Natural

[@shivkuma100]

Prof. Damodaran: two questions. 1. What is the "growth" rate g in the formula? Is it stable growth (from terminal value) or some blend of that and the short term growth pre-terminal value ? 2. If you use FCFE for potential payout, it would imply no reinvestment, and hence would not support any growth. How do you handle that nuance ?

[@smholding7]

The reinvestment is already netted out in FCFE. It's what leftover after reinvestment needs and net debt issued.

[@azlankamalludin6379]

Dear Sir, I am a novice investor.. One quick question.. For EPS (Trailing).. if in one of the quarter the EPS number was negative, how do you suggest I tabulate it...(ignore, average, add ??) THanks Sir

[@vikatambaeva1369]

Where can I find data for the regression analysis in the end of the video?

[@baktashjami]

Where can someone get your sessions for beginners learning equity analysis and valuation? ABC of equity analysis and valuation

[@arulasveen]

This is a beginners class, kind of I think. Most of the concepts explained are the basics. If you do not understand any, you must google and find it from other places. I dont think we can expect him to teach basic statistics like how we get Beta etc. He did explain them though.

[@lseul8812]

Education is on point with this man…. But some of these outfits really make me question him

[@SherryXShi]

how to calculate the expected growth? or which session should I refer to? thanks.

[@baktashjami]

Can you kindly answer who are your targeting audience for this video?

[@josephlombardo1267]

Not sure how to take it...even if revenue and margin end up at the higher end of the distribution, wouldn't the return be mediocre at current price?

[@tiffidee]

listening to this in 2022 lol

[@psaurians]

Dear All, what is stats 101 book? Could someone tell me this, please?

[@vinay5047]

I think he just said in the video 'Running a regression'.

[@vinay5047]

you can run the regression in the MS Excel. if you don't have any idea about the regressions...refer to this video kzbin.info/www/bejne/fpjJeZicrLBqjLM.

[@dodgingdurangos924]

Stats is short for Statistics. "101" class usually refers to the basics/introductory level of a subject, e.g. English 101, Chemistry 101, etc. "So-and-so"101 is also a common American expression used when we try to explain the basic rules of thumb of a subject in or outside of academics. For example, Gymnastics101: you gotta stick the landing. Or Cooking101: always taste and adjust for seasonings.

[@user-fu6nm5sh2o]

where to find start 101?

[@xcinvestment1231]

presentation slides here: people.stern.nyu.edu/adamodar/pdfiles/valonlineslides/session15.pdf

[@mikhaillindan9091]

The guy is an absolute G-d

[@bwoodward9564]

Many people here ask interestig questions. I wonder if you actually answer them.

[@Skhulu]

a really, really forward PE. HAHAHAHA

[@chandrajha4582]

Don't see Hansen Natural at 12:30

[@Juanijia]

Damodaran > God

[@surajt2077]

😂😂😂