<p class = "canvas-atom-text-canvas Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The purpose of this article is to teach you to understand how to use price / earnings ratios (P / E ratios) We will show how you can use those of Come Sure Group (Holdings) Limited (HKG: 794) P / E ratio to inform your assessment of the investment opportunity. Come Sure Group (Holdings) has a price / earnings ratio of 4.27, based on the last twelve months. In other words, at current prices, investors are paying $ 4.27 Hong Kong for every dollar of profit last year. "Data-reactid =" 27 "> The purpose of this article is to teach you how to use price / earnings ratios (P / We will show you how to use the P / E ratio of Come Sure Group (Holdings) Limited (HKG: 794 ) to inform your assessment of the investment opportunity. Come Sure Group (Holdings) has a price / earnings ratio of 4.27, based on the last twelve months. In other words, at today's prices, investors are paying $ 4.27 Hong Kong for every dollar earned in the previous year.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " See our latest analysis for Come Sure Group (Holdings) "data-reactid =" 28 "> See our latest analysis for Come Sure Group (Holdings)

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Want to help shape the future of tools and investment platforms? Participate in the survey and participate in one of the most advanced studies of stock market investors to date."data-reactid =" 29 ">Want to help shape the future of tools and investment platforms? Take the survey and participate in one of the most advanced studies of stock market investors to date.

How to calculate a price / earnings ratio?

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The price formula to the benefit is: "data-reactid =" 31 "> The price formula to the benefit is:

Price / earnings ratio = Price per share ÷ Earnings per share (EPS)

Or for Come Sure Group (Holdings):

P / E of 4.27 = 0.79 HKK 0.1 0.19 HKK (based on the twelve months prior to September 2018.)

Is a high price-earnings ratio good?

<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "A higher P / E ratio implies that investors pay a higher price for the power to win the business. This is not a good or a bad thing in itselfbut a high P / E means that buyers are optimistic for the future. "data-reactid =" 36 "> A higher P / E ratio implies that investors pay a higher price for the power to win the business. This is not a good or bad thing in itself, but a high P / E means that buyers are optimistic about the future.

How growth rates affect P / E ratios

Profit growth is probably the most important factor in determining a company's P / E ratio. As incomes rise, the "E" increases over time. Therefore, even if you pay a high multiple of your income now, this multiple will become lower in the future. A lower P / E should indicate that the stock is inexpensive relative to others – and that this can attract buyers.

Earnings per share of Come Sure Group (Holdings) decreased by 2.6% over the last twelve months. But EPS is up 16% over the last 5 years.

How does the P / E ratio of Come Sure Group (Holdings) compare to its peers?

The P / E ratio indicates whether the market has greater or lesser expectations of a company. The image below shows that Come Sure Group (Holdings) has a P / E lower than the average (12.2) of that of the companies in the packaging sector.

SEHK: 794 PE PEG Gauge 12th January 19

More

<p class = "web-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The content of the project of Come Sure Group (Holdings) E tells us that market players think it will not do as well as its peers in the same industry. Given that the market does not seem impressed by Come Sure Group (Holdings ), it is quite possible that he may surprise on the rise. if insiders buy sharesas this could imply that they think the title is undervalued. "data-reactid =" 54 "> The P / E of Come Sure Group (Holdings) tells us that market players think it will not do as well as its peers. the market does not seem impressed by Come Sure Group (Holdings), it is quite possible that this may surprise upward. if insiders buy sharesas this could imply that they believe the stock is undervalued.

Limit: P / E ratios ignore debt and cash in the bank

It is important to note that the P / E ratio takes into account the market capitalization and not the value of the company. This means that it does not take into account debt or cash. In theory, a company can reduce its future P / E ratio by using cash or debt to invest in growth.

Overall, these expenses can be good or bad, but the bottom line here is that you need to look at the debt to understand the P / E ratio in its context.

Does the debt have an impact on the P / E of Come Sure Group (Holdings)?

Net debt amounts to 66% of the market capitalization of Come Sure Group (Holdings). This is sufficient debt for you to make adjustments before using the P / E ratio in order to compare it to a company with net cash.

The net result of Come Sure Group (Holdings)

Come Sure Group (Holdings) trades on a P / E ratio of 4.3, which is below the Hong Kong market average of 10.3. The P / E ratio reflects the pessimism of the market, probably due to the absence of recent earnings per share growth, combined with significant leverage.

The story continues

<p class = "canvas-atom-text-canvas Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Investors have an opportunity when market expectations for a As stock investor Benjamin Graham says: "In the short term, the market is a voting machine, but in the long run it is a balance." Although we do not have any forecasts of analysts, you could get a better understanding of its growth by checking this more detailed historical chart data-reactid = "66"> Investors have an opportunity when market expectations for an action are wrong. As the value investor Benjamin Graham says, "in the short term, the market is a voting machine but, in the long run, it is a weighing machine." Although we do not have any analysts' forecasts, you could better understand its growth by looking at this more detailed historical chart of earnings, revenues and cash flow.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Of course, you could find a fantastic investment by looking at some good candidates. So take a look at this free list of companies with little or no debt, whose P / E is less than 20. "data-reactid =" 67 "> Of course, you could find a fantastic investment by looking at some good candidates. So take a look at this free list of companies with little or no debt, whose P / E is less than 20.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "To help readers understand the past volatility of the financial market in the short term, our goal is to provide you with a long-term research analysis based solely on fundamental data. Note that our analysis does not take into account the latest price sensitive business announcements.

The author is an independent contributor and, at the time of publication, was not positioned in the mentioned actions. For errors that need to be corrected, please contact the publisher at editorial-team@simplywallst.com.

"data-reactid =" 68 "> To help readers understand the short-term volatility of the financial market, we aim to provide you with a long-term research analysis based solely on fundamental data. account of the latest price sensitive business announcements.

The author is an independent contributor and, at the time of publication, was not positioned in the mentioned actions. For errors that need to be corrected, please contact the publisher at editorial-team@simplywallst.com.