MARKET TECH VIEW

PEG ratio can help you spot multibaggers; 10 stocks which rose over 100% in 1 year

PEG ratio or price/earnings to annual EPS growth which can provide a more holistic picture of the stock especially in a bull market where P/E ratio tends to look inflated. Finding value in the Indian market is hard, especially at a time when markets are trading at record highs. Benchmark indices have rallied over 17 percent in the last one year but there are a lot of stocks which have already more than doubled in the same period. To find value in markets even when most of the stocks have already doubled in the last one year could be a tough task. To make the job easier for investors, there is one ratio which is easy to calculate and is readily available i.e. PEG ratio. PEG ratio or price/earnings to annual EPS growth which can provide a more holistic picture of the stock especially in a bull market where P/E ratio tends to look inflated. A Price to Earnings ratio (PE) can be calculated by dividing market value per share by earnings per share (EPS). The relationship between the PE and Earnings growth gives a complete overview if the stock and valuation compared to P/E on its own. There are a number of stocks which saw huge price appreciation if tracked based on PEG ratio. For simplicity, we have taken a list of top ten stocks which more than doubled investors’ wealth and still has a lower PEG ratio, of less than 1. Some stocks which have a PEG ratio of less than 1 include names like Avanti Feeds, JM Financial, Sunteck Realty, Dewan Housing Finance, Edelweiss Financial Services,...