Price to Earnings Growth

I think we are drawing way too many conclusions from PEG. Can you cite any study which suggest that PEG<1 represents undervaluation?

If that were the case people would just buy stocks with PEG<1 an sell stocks with PEG>1 till all stocks had a PEG=1. Yes, you may argue that people have different expectations of growth. But using PEG to infer "valuation" is simply naive. Can we be a bit more objective?

Walim 20:14, October 22, 2008 (PDT)

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