In oil & gas industry, PE is general nick-name to Petroleum Engineer. But in Stock, P/E or PER referred to Price-Earning Ratio. It is just a matter of Price of the underlaying shares divided by it's earning-per-share (EPS). E.g. If Maybank priced at RM12.50 with lastest reported earning of RM0.75 per share, then it's P/E will be 16.7.
Basically, investors use P/E to justify if the stock is cheap. However, bare in mind that P/E itself is useless. Common practices is comparing P/E within the same industry. As a simple example, for banking industry, compare Maybank's, Public Bank's & Bank Islam's P/E. Lower P/E means cheaper in value.
Another 'analyst' way is comparing the stock' P/E within the same industry, with almost similar business model but to other region. E.g. comparing Air Asia with Virgin Air. Conclusion, price itself doesn't indicate it's value of cheap/expensive.
Basically, investors use P/E to justify if the stock is cheap. However, bare in mind that P/E itself is useless. Common practices is comparing P/E within the same industry. As a simple example, for banking industry, compare Maybank's, Public Bank's & Bank Islam's P/E. Lower P/E means cheaper in value.
Another 'analyst' way is comparing the stock' P/E within the same industry, with almost similar business model but to other region. E.g. comparing Air Asia with Virgin Air. Conclusion, price itself doesn't indicate it's value of cheap/expensive.
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