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Moral of the Story
Whether you prefer growth stocks or value stocks, understanding the underlying dynamics of a company's P/E ratio is critical. Before allowing a simple P/E ratio to scare you away from an investment, be sure to gain an understanding of whether earnings (the E) are understated or if the company's future revenue growth will drop an abnormally cheap ugg channing boots large cheap ugg boots yahoo amount of profit to the bottom line.
If so, cheap ugg trainers you'll know that the company's P/E ratio is artificially inflated and can "adjust" it. An adjusted P/E can help you determine if a stock is really overvalued or simply misunderstood, giving you a critical cheap ugg josette advantage over the average investor.
Source: P/E Ratios Are Robbing Your Returns!