Is It Time to Say Bye to High PE Stocks & Have A Look at Value Stocks? Know Here!

The two principal investing methods are High PE stocks and Value stocks. Which is the superior philosophy? 

The answer depends on who you ask. Both camps are staunch in their beliefs, each committed to the singular opinion that theirs is the best way to invest safely and receive the most returns. 

This article focuses on providing the critical differences between these stock types and providing reasons why Value stock Investing might be the next big thing.

What Are High PE Stocks?

The PE Ratio, or Price to Earnings Ratio, is a valuation statistic that compares a firm's existing share price to its current EPS or Earnings Per Share. This PE Ratio is also known as the earnings multiple or the price multiple. A high PE ratio stock may indicate that the firm's stock is overpriced or that investors anticipate rapid growth in the coming years.

What Are Value Stocks?

A value stock is a stock that looks to move at a lower price compared to its characteristics, such as dividends, profits, or sales, and hence appeals to investors interested in value trading.

Why Have Value Stocks Gained Popularity Recently?

Deciding on how to invest your money is a monumental task. If you're like most investors, you'll need to choose the investments that will correspond with your chosen investment strategy once you've decided on an asset allocation plan. 

One of your choices will be whether to buy Value stocks, high PE stock investing, or both. 

Which will yield the best results? As a beginner in the stock market, it can be challenging to determine which types of stocks are best. 

The answer to this question may differ depending on the investor's timeframe. Value stocks generally rise in price steadily over time and keep their value in the long run. On the other hand, high PE stocks are much more volatile, exhibiting share values that vary fast over shorter periods.

So, value stocks may be the best solution for investors looking to balance risk and return. By definition, value companies trade at a price below their intrinsic value. However, sometimes these companies also offer dividend benefits – a significant plus in the declining market. 

Thus, as these companies improve their performance over time, a well-diversified basket of value stocks has the potential to provide a significant amount of returns.

As you can see, value stocks can do well for your portfolio, but you still have to do your homework. It's essential to check through a company's financials when looking at value stocks. Your primary focus should be on the companies expanding at a much faster rate than the competitors in the market. 

What Is Sharekhan offering?

If you’ve been investing in individual stocks in Indian stock markets, Sharekhan has an app that will simplify your trading experience. 

With Sharekhan Research, you can now make better-informed decisions with just a mouse click. Our real-time recommendations on value stocks and High PE stocks are delivered smartly to your inbox to take the best actions on the stocks you care about. 

The portfolio page on Sharekhan makes it easy to manage your value stocks and High PE Stocks. You may update your portfolio, change or add assets, examine the valuations of the equities in your portfolio, and ask our professional staff any queries you may have - no more second-guessing, no more wishy-washy decisions.

Why Choose Sharekhan?

Do you have a stock investment portfolio? Do you trade in the markets yourself, or does a broker handle it? Or maybe you have no idea how stocks work and the benefits of investing in the markets. 

Whatever your situation, we can help with simple, easy-to-understand solutions that may sound too good to be true – but are - we promise. We can simplify the idea of stock investing for you, give you a head start on possibly becoming a more successful investor, and afford you peace of mind for your money.

Get more intelligent insights into the market and benefit from understanding the recommendations of our Research Analysts. Our end-to-end trading support is readily available through your account manager and includes 24/7 support, educational webinars, research reports, and access to a vast library of advisory services.

We understand that embarking on a course to invest in stocks and securities can be overwhelming. It helps to have an investment guide by your side, especially during the first few steps of the process. But there is no need to despair; Sharekhan offers all new investors a helping hand when picking the stock market. 

So, what are you waiting for? Get started by investing today!