The reasonable price here generally refers to the valuation we often say. We have passed the P/E ratio (PE), P/B ratio (PB) and P/B ratio before. The most common is the price-earnings ratio (PE). Recently, careful investors found that there are actually three kinds of PE, static PE, dynamic PE and rolling PE. What's the difference between them? How should I use it when investing? Let's talk about it in detail today.
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Static, dynamic and rolling P/E ratios
Do you remember the concept of price-earnings ratio? P/E ratio = share price/earnings per share, which is often used to evaluate whether the stock price level is reasonable. These three P/E ratios are all generated in this formula. Each stock has only one share price, but earnings per share is a financial indicator, which is usually published in quarterly, semi-annual and annual reports. Therefore, according to the different calculation time of earnings per share, there are different algorithms for P/E ratio.
First of all, the static P/E ratio directly uses the data of earnings per share in the latest annual report, and the calculation formula is: static P/E ratio = current stock price per share/earnings per share in the previous natural year. For example, the static P/E ratio is now calculated using the earnings per share index in the 2020 annual report. Assuming that the current share price of Company A is 100 yuan and the earnings per share in 2020 is 5 yuan, the static P/E ratio of the stock is 100 yuan /5 yuan =20 times.
The dynamic P/E ratio is calculated by forecasting the earnings per share of this year according to the published financial report. The calculation formula is: dynamic P/E ratio = current market price per share/annual earnings per share converted from quarterly data. For example, to calculate the dynamic P/E ratio now is to predict the full-year earnings per share in 20021year according to the earnings per share data in the first quarterly report of 20021year, that is, the earnings per share in the first quarter is multiplied by 4, if it is the earnings per share in the semi-annual report/2 * 4; Or earnings per share for three quarters/3 * 4; Or annual earnings per share, based on the latest quarterly or annual report data published by the exchange. Assuming that the current share price of Company B is 100 yuan, and the earnings per share in the first quarter of this year is 2 yuan, and it is predicted that the earnings per share this year is 2 yuan *4=8 yuan, the dynamic P/E ratio is 100 yuan /8 yuan = 12.5 times.
There is also rolling price-earnings ratio, also called price-earnings ratio (TTM), which is a technical term in stock investment and financial analysis. As we all know, the off-season profit of 6.5438+million and the peak season are two completely different concepts. The significance of introducing TTM is to eliminate seasonal changes in financial analysis and make the analysis more rigorous. The annual report of listed companies is published once every quarter, so TTM is based on the financial data of 12 months, that is, four quarters. The calculation formula of rolling P/E ratio is: rolling P/E ratio = current price per share/earnings per share in the last four quarters. Earnings per share for the past four quarters are the sum of the reported earnings per share for the four periods from now. For example, to calculate the rolling P/E ratio now, we use the earnings per share indicators in the first quarter of 202/KLOC-0 and the second, third and fourth quarters of 2020. For example, the current share price of Company C is 100 yuan, and the earnings per share in the first quarter of this year and the second, third and fourth quarters of last year are 2 yuan, 3 yuan, 3 yuan and 2 yuan respectively, so the rolling P/E ratio is 100 yuan /(2+3+3+2) yuan = 10 times.
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Which should ordinary investors look at?
In fact, from Xiao Xia's explanation, we should be able to distinguish the characteristics of these three P/E ratios.
The static P/E ratio uses the data of the latest annual report, so this data is more suitable for use when the annual report is about to be released. For example, it is more appropriate to look at the static P/E ratio at the moment. If it is at the end of the year or the beginning of the year, the earnings per share data at this time will lag behind, leading to the distortion of static P/E ratio.
Dynamic P/E ratio is calculated by forecasting future profits according to published financial reports. The advantage is that the organization can predict the latest financial indicators according to the latest trend of the company, which is real-time and can show the dynamic changes of a company's performance growth or development. But the disadvantage is that since it is forecast data, there may be deviation, which leads to deviation of dynamic P/E ratio. Generally speaking, if the information is comprehensive, we can judge whether the current value of listed companies is undervalued by dynamic P/E ratio.
Rolling P/E ratio is based on the financial data of the last four quarters, excluding seasonal factors, so this data is a relatively more accurate P/E ratio data, and it is also an indicator that we often use when investing. Generally, the P/E ratio we see in research reports or analysis is usually rolling P/E ratio.
In addition, these three P/E ratios are applicable to different types of enterprises. Generally speaking, for companies with high performance growth, the lag effect of static P/E ratio will be more obvious, and the rolling P/E ratio will be more accurate at this time; For some companies with relatively stable development and little fluctuation in performance in recent years, you can refer to three P/E ratios, which are generally not much different. (Reference source: Sohu, 20 18.05. 15)
Knowing the applicable environment of the three P/E ratios, just like the recently disclosed annual report and quarterly report, we can learn and understand the valuation of various industry sectors. If the price-earnings ratio is used to measure the valuation level of industries and individual stocks, remember to compare them horizontally and vertically. We will show you how to compare them in detail. Of course, if you think your research is too complicated, it is easier to choose fund investment and let professionals help us choose more.