> What are multiples?

What are multiples?

Posted at: 2014-12-05 
"Look at the multiples to see where the mkt is trading"

What is the above statement referring?

Typically price-to-earnings ratio.

If a company earns $0.10 a share a year (100,000,000 shares and the company earned $10,000,000 last year) and the stock is trading at $1.50 a share, that's 15 times earnings.

For well established companies that don't see much growth, P/E ratios of 15-17 are common.

Honestly, you should not even be thinking about the stock market if you don't know this.

"Look at the multiples to see where the mkt is trading"

What is the above statement referring?