The p/e ratio of any company that's fairly priced will equal its growth rate
"The p/e ratio of any company that's fairly priced will equal its
growth rate ... If the p/e of Coca-Cola is 15, you'd expect the
company to be growing at about 15 percent a year, etc. But if the p/e
ratio is less than the growth rate, you may have found yourself a
bargain. A company, say, with a growth rate of 12 percent a year ...
and a p/e ratio of 6 is a very attractive prospect. On the other hand,
a company with a growth rate of 6 percent a year and a p/e ratio of 12
is an unattractive prospect and headed for a comedown."
"In general, a p/e ratio that's half the growth rate is very positive,
and one that's twice the growth rate is very negative."
