Lowest Estimated PEG Ratios in the Russell 1000

The PEG ratio is a widely followed fundamental indicator that divides a company's price to earnings ratio by its growth rate.  Incorporating growth rates into the valuation model gives investors a bit more perspective when analyzing a company.  An Investor looking at two companies with the same P/E ratios might gravitate towards the one with the higher growth rate, and the PEG ratio quickly helps identify these differences among stocks.

Below we highlight the three stocks in each of the ten sectors that currently have the lowest estimated PEG ratios based on next year's forecasts.  A key point here is that the numbers are based on estimates, but these PEGs are extremely low due to the big drop in share prices over the past few months.  A PEG ratio below one has historically been considered attractive for a stock, and the majority of the names below have PEGs below 0.30.  Again, these PEGs are based on estimates for 2009 that have already declined quite a bit, but many don't believe the estimates have come down nearly enough.  Even if the estimates turn out to be overstated by 50%, however, most of the PEGs below would still be well under one.  Some of the companies below will no doubt face problems over the next few quarters, but others will turn out to be great buys at these levels.

Comments

[Market Folly:]

some solid names in that list. lots of hedge fund ownership too in some of those names as well... too many to list.

just run a search for the tickers on my site and the various hedge funds will show up www.marketfolly.com/

2008 Oct 20 08:16 PM

[John Lounsbury:]

How did VZ (a PEG of 1.21) get on your list?

2008 Oct 21 09:28 AM