Bill O’Neil Quotes on Stock Valuation

By
David
– July 8, 2011Posted in: CAN SLIM, Capital Gain, Paper Assets, Strategies

To say a security is “undervalued” because it’s selling at a low P/E [Price-to-Earnings Ratio] or because it’s in the low range of its historical P/E is nonsense. Primary consideration should be given to whether the rate of change in earnings is substantially increasing or decreasing.

Everything sells for about what it is worth at the time. If a company’s price and P/E [Price-to-Earnings] ratio change in the near future, it’s because conditions, events, psychology, and earnings continue to improve or suddenly start to deteriorate as the weeks and months pass.

Out of the ways a company can achieve enormous success, thereby enjoying large gains in its stock price, is by introducing new products into the marketplace. We’re not talking about a new formula for dish soap. These products and companies have to revolutionize the way we live.

Tags:
Investors:
Quote Authors: