Profitability has two data that can be used as an important reference for investment index funds, one is 10% and the other is 6.4%. When the yield is greater than 10%, you can start buying. When the profit rate is lower than 6.4%, it can be sold.
The fund has no P/E ratio, but index funds can understand the valuation of the fund by looking at the P/E ratio of the tracking index. This is only for index funds, and other funds are not applicable. There is an index traffic light in Alipay, and you can see the valuation of each index. Price-earnings ratio (P/E or PER), also known as "cost-earnings ratio", "stock price-earnings ratio" or "market price-earnings ratio". P/E ratio refers to the ratio of stock price divided by EPS. Or divide the company's market value by the annual profit attributable to shareholders.
When calculating, the stock price usually takes the latest closing price, and if EPS is calculated according to the published EPS of the previous year, it is called historical price-earnings ratio; Generally, consistent estimation is used to calculate EPS estimated P/E ratio, that is, the estimated average or median value obtained by the institutions that track the company's performance after collecting the forecasts of many analysts. What is a reasonable price-earnings ratio, there is no certain standard.
P/E ratio is the ratio of share price to earnings per share. The price-earnings ratio widely discussed in the market usually refers to the static price-earnings ratio, which is usually used as an indicator to compare whether stocks with different prices are overvalued or undervalued. It is not always accurate to measure the texture of a company's stock with price-earnings ratio. It is generally believed that if the price-earnings ratio of a company's stock is too high, then the price of the stock is in a bubble and its value is overvalued. When a company grows rapidly and its future performance is promising, when comparing the investment value of different stocks with P/E ratio, these stocks must belong to the same industry, because the company's earnings per share are close and the comparison is effective.
P/E ratio is one of the most commonly used indicators to evaluate whether the stock price level is reasonable, and it is a valuable stock market indicator. On the one hand, investors often don't think that the profit figures calculated in strict accordance with accounting standards truly reflect the profitability of the company on the basis of going concern. Therefore, analysts often adjust the company's official net profit by themselves.