Actively Speaking Podcast

The P/E Ratio: A User's Manual

February 06, 2020 Epoch Investment Partners Episode 15
Actively Speaking Podcast
The P/E Ratio: A User's Manual
Chapters
Actively Speaking Podcast
The P/E Ratio: A User's Manual
Feb 06, 2020 Episode 15
Epoch Investment Partners

Does a stock’s price and its P/E ratio tell you how much a company is worth? Conventional wisdom says yes, but we think otherwise. In this episode, Steve explores the theory behind the discounted cash flow (DCF) valuation model and the underappreciated role that ROIC plays in the model. He demonstrates how we can use what we have learned about the DCF model to deconstruct P/E ratios in the real world to better understand what they do tell us. (February 06, 2020)

Show Notes

Does a stock’s price and its P/E ratio tell you how much a company is worth? Conventional wisdom says yes, but we think otherwise. In this episode, Steve explores the theory behind the discounted cash flow (DCF) valuation model and the underappreciated role that ROIC plays in the model. He demonstrates how we can use what we have learned about the DCF model to deconstruct P/E ratios in the real world to better understand what they do tell us. (February 06, 2020)