Why do investors believe that low price/earnings stocks are trading cheap in the market?
Why do investors believe that low price/earnings stocks are trading cheap in the market?
Homework Answers
Companies with a low Price Earnings Ratio are often considered to be value stocks. It means they are undervalued because their stock price trade lower relative to its fundamentals. This mispricing will be a great bargain and will prompt investors to buy the stock before the market corrects it.
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Why do investors believe that low price/earnings stocks are
trading cheap in the market?
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