The P/E ratio in the stock is that the price of the stock is higher than the earnings per share, and there is generally no P/E ratio in the fund, but the P/E ratio of a partial stock fund can also be calculated. Firstly, the static P/E ratio of all the stocks in the stock basket can be calculated, and then the approximate P/E ratio of this fund can be calculated by weighted average with the fund investment ratio as the weight.

Issue price-earnings ratio

The P/E ratio refers to the ratio of the market price of a stock divided by the earnings per share, which is usually the earnings during an investigation period (usually 12 months). This ratio can clearly reflect the specific time required for an investment to return to its original cost. For example, the current share price of a listed company is 25 yuan, so the purchase cost is calculated according to 25 yuan. If the company's earnings per share in the past year can reach 5 yuan, then 25/5 = 5 times is the current price-earnings ratio. That is, the money you invested will take the company five years to earn back. Therefore, in general, the lower the P/E ratio of a stock, the lower its market price relative to the profitability of the stock, which shows that the shorter the payback period, the smaller the investment risk, and thus the greater the investment value of the stock. Therefore, the price-earnings ratio of 22.99 times usually means that the cost can be recovered in 22.99 years according to the current stock returns. However, due to different industries, the P/E ratio is quite different, the development prospect of traditional industries is not great, the P/E ratio is usually low, and the development space of high-tech enterprises is large, so investors will give higher valuations and the P/E ratio will become higher.

How to use P/E ratio correctly

Usually, there are three methods to use P/E ratio: one is to analyze the historical P/E ratio of the company; The second one can compare the price-earnings ratio between the company and its peers, and the industry average price-earnings ratio. The third is to study the composition of the company's net profit. As we all know, the price of a stock is hard to guess. No stock can go up all the time, and of course the same share price can't go down all the time. So we can choose whether to buy stocks and when to buy them by studying the price-earnings ratio. For example, a stock has been profitable for more than 8. 15% of the time in the last decade. On the other hand, the current price-earnings ratio of a stock is lower than 9 1.85% in recent ten years, which is in a relatively undervalued range, so you can try to consider buying it.