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PEG 10 years, 4 months ago #28

  • niajy
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How do I screen by PEG (price to earnings to growth) pls?

Thnx
niajy

Re: PEG 10 years, 4 months ago #29

  • admin
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There are multiple ways to calculate PEG, which is essentially Price (Market Capitalization) divided by earnings (your choice) divided by growth rate (your choice). I recommend using trailing twelve month Normalized Net Income as the earnings metric and long term EPS growth rate as the growth metric. This results in the following screener conditions (assuming you are looking at companies that report quarterly):

Calculate PEG <= your cutoff
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( Market capitalization / ( Normalized Net Income(I) + Normalized Net Income(I-1) + Normalized Net Income(I-2) + Normalized Net Income(I-3) ) ) / ( Current long term growth of EPS rate ) <= [PEG threshold]

Require Positive Net Income
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( Normalized Net Income(I) + Normalized Net Income(I-1) + Normalized Net Income(I-2) + Normalized Net Income(I-3) ) > 0

Require Positive Growth
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Current long term growth of EPS rate > 0

Require Reasonable Growth
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Current long term growth of EPS rate < 100

You probably want to exclude N/A values and add the free form column:

( Market capitalization / ( Normalized Net Income(I) + Normalized Net Income(I-1) + Normalized Net Income(I-2) + Normalized Net Income(I-3) ) ) / ( Current long term growth of EPS rate )

which will let you rank by your calculated PEG ratio.
Last Edit: 10 years, 3 months ago by admin.
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