PEG
Filter
PEG Ratio Filter (PEG)
Find stocks by PEG ratio, including PEG under 1, in real time, with Trade Ideas Streaming Alerts (Scanner) and Top Lists (Screeners). The PEG (Price/Earnings to Growth) ratio divides the P/E ratio by the company's expected earnings growth rate.
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Seeing a growth-at-a-price stock start to move as it happens helps active traders. The PEG Ratio filter value changes once a day, so Streaming Alerts apply it the moment each alert fires: you see only the stocks that pass it, while they are moving.
How Trade Ideas finds it: set the minimum value to 1 to see only stocks in which investors are paying more for each unit of expected earnings growth. See Trade Ideas plans and pricing to run it live.
How the PEG Ratio filter works
Key point
The Price/Earnings to Growth (PEG) ratio is a valuation metric used to assess the relationship between the price of a stock, its earnings per share (EPS), and the company's expected growth rate. Unlike traditional P/E ratios, which focus solely on current earnings, the PEG ratio incorporates the company's projected earnings growth into its valuation. The PEG ratio provides a forward-looking measure of a stock's valuation relative to its expected earnings growth over the next five years.
Calculation: The formula for calculating the PEG ratio is: P/E Ratio / Projected Earnings Growth Rate.
Key point
Interpretation: A PEG ratio of 1 indicates that the stock is fairly valued relative to its earnings growth rate. A PEG ratio below 1 may suggest that the stock is undervalued, while a PEG ratio above 1 may indicate overvaluation. A lower PEG ratio suggests that investors are paying less for each unit of expected earnings growth, making the stock potentially more attractive from a valuation perspective. The PEG ratio provides a more comprehensive assessment of a stock's valuation by considering both its earnings and growth prospects.
PEG Ratio filter settings
Configuring the "PEG Ratio" filter is simple and can be done within the Window Specific Filters Tab of the Configuration Window in your Alert or Top List (Screener) window.
Here's how to set up the filter in your configuration window:
- Set the minimum value to 1 to see only stocks in which investors are paying more for each unit of expected earnings growth.
Using the PEG Ratio Filter
The "PEG Ratio" filter can be used in various trading strategies, including:
- PEG Ratio Screening: Screen for stocks with PEG ratios below 1, indicating potential undervaluation relative to their earnings growth prospects. Focus on stocks with strong fundamentals, positive earnings growth expectations, and reasonable valuations based on their PEG ratios.
- Relative Valuation: Compare the PEG ratios of stocks within the same industry or sector to identify relative valuation disparities. Take long positions in stocks with lower PEG ratios compared to their peers, anticipating potential price appreciation driven by reversion to the mean or market recognition of undervaluation.
- Growth Investing: Look for stocks with PEG ratios below 1 that exhibit strong earnings growth potential and positive momentum. Take long positions in growth stocks with attractive PEG ratios, expecting continued earnings expansion and potential capital appreciation.
Filters to combine with PEG Ratio
Categories
FAQ
Which stocks have a PEG ratio under 1?
Add the PEG Ratio filter (PEG) to a Trade Ideas Streaming Alerts or Top List (Screener) window. Set the minimum value to 1 to see only stocks in which investors are paying more for each unit of expected earnings growth.
What is the PEG Ratio filter?
The PEG (Price/Earnings to Growth) ratio divides the P/E ratio by the company's expected earnings growth rate.
What is a good PEG ratio?
Use the PEG Ratio filter (PEG) in Trade Ideas Streaming Alerts and Top Lists to find stocks by PEG ratio, including PEG under 1. The PEG (Price/Earnings to Growth) ratio divides the P/E ratio by the company's expected earnings growth rate.