S
Skin
Guest
I spent some time learning about P/E ratios. This is the Price to Earnings ratio and discovered that "earnings" means after-tax profit.
The confusion sets in when I look at certain irish banks in todays stock market that are trading with a P/E ratio of less than 8.
So if I were to invest in one share of these banks I would effectively be getting a share that returns a profit of over 12.5% in one year for that share.
Is this not a bargain?? If so why is the price so low?? Or what am I misunderstanding??
The confusion sets in when I look at certain irish banks in todays stock market that are trading with a P/E ratio of less than 8.
So if I were to invest in one share of these banks I would effectively be getting a share that returns a profit of over 12.5% in one year for that share.
Is this not a bargain?? If so why is the price so low?? Or what am I misunderstanding??