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What does P/E mean?

The Price to Earnings Ratio (also called the PE ratio) is the primary valuation ratio used by most equity investors. It is a measure of the price paid for a share relative to the annual net income or profit earned by the firm per share.A hig P/E ratio means that investors are paying more for each unit of net income, so the stock is more expensive compared to one with a lower P/E ratio. The P/E ratio can be seen as being expressed in years, in the sense that it shows the number of years of earnings which would be required to pay back the purchase price, ignoring inflation. Unlike the EV/EBITDA multiple which is capital structure-neutral, the price-to-earnings ratio reflects the capital structure of the company in question. The reciprocal of the P/E ratio is known as the earnings yield.

Stockopedia explains P/E...

This is is the primary valuation ratio used by most equity investors. A high P/E ratio means that investors are paying more for each unit of net income, so the stock is more expensive compared to one with a lower P/E ratio. The P/E ratio can be seen as being expressed in years, in the sense that it shows the number of years of earnings which would be required to pay back the purchase price, ignoring inflation.

Unlike the EV/EBITDA multiple which is capital structure-neutral, the price-to-earnings ratio reflects the capital structure of the company in question

What does RS 6m mean?

6 month relative Strength measures a stock's price change over the last 6 months relative to the price change of a market index (e.g the FTSE All Share). It shows the relative outperformance or underperformance of the stock in that timeframe.

This figure is sourced from Thomson Reuters. It is calculated dividing the price change of a stock by the price change of the index for the same time period. e.g. A stock falling by 20% versus an index rising 20% would lead to a Relative strength calculation of 100 * ( 80/120 - 1) = -33%

Stockopedia explains RS 6m...

Research indicates that relative strength is a negative signal in the near-term but generally a positive indicator in the medium (6-24 months).

A study by Hancock found a momentum-based strategy outperformed a broad universe of U.S. stocks by nearly 4% per year from 1927-2009. Research has shown that momentum is particularly beneficial when combined with a value style because the two are negatively correlated. Moskowitz and Grinblatt conclude that "A value-momentum combination mitigates the extreme negative return episodes a value investor will face (e.g., the tech boom of the late 1990s and early 2000 or a dismal year like 2008)".

However, momentum-based strategies have been shown to suffer badly during times of extreme market volatility such as the 2008/09 crisis.

What does RS 3m mean?

3 month relative Strength measures a stock's price change over the last three months relative to the price change of a market index (e.g the FTSE All Share). It shows the relative outperformance or underperformance of the stock in that timeframe.

This value is sourced from Thomson Reuters. It is calculated dividing the price change of a stock by the price change of the index for the same time period. e.g. A stock falling by 20% versus an index rising 20% would lead to a Relative strength calculation of 100 * ( 80/120 - 1) = -33%

Stockopedia explains RS 3m...

Research indicates that relative strength is a negative signal in the near-term but generally a positive indicator in the medium (6-24 months).

A study by Hancock found a momentum-based strategy outperformed a broad universe of U.S. stocks by nearly 4% per year from 1927-2009. Research has shown that momentum is particularly beneficial when combined with a value style because the two are negatively correlated. Moskowitz and Grinblatt conclude that "A value-momentum combination mitigates the extreme negative return episodes a value investor will face (e.g., the tech boom of the late 1990s and early 2000 or a dismal year like 2008)".

However, momentum-based strategies have been shown to suffer badly during times of extreme market volatility such as the 2008/09 crisis.

What does EPS Surprise %, Last Yr mean?

If a company releases a number higher or lower than the consensus (a combination of all the released estimates), this is known respectively as a positive or negative surprise.

Stockopedia explains EPS Surprise %, Last Yr...

An upside surprise - where a company reports higher earnings than analysts predicted - has often been observed to trigger an increase in the stock price.

What does Mkt Cap £m mean?

Market Capitalisation is an indicator of the size of the company, specifically the total market value of the company's shares. It is calculated by multiplying the current Share Price by the current number of Shares Outstanding. This value is standardized into £ Sterling and it is updated each night (i.e. it is not 15 minute delayed data).

Stockopedia explains Mkt Cap £m...

Market Capitalisation only takes into account the value of the company's shares (equity), it ignores the amount of debt a company may have taken on and therefore isn't the best indicator of the company's size. The Enterprise Value adds the net debt to the Market Cap and is a better indicator of the minimum amount that an acquiring company may have to pay to buy the firm outright.