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There has been a lot of talk about startups taking the space in the EV, but the fact is the old companies have also been working towards their EV plans. Given the amount of cash they are sitting with in their balance sheet, there is high probability that they will be able to launch a number of models out of which some would be successful and become the cash cows and deliver growth. So, don't write off the ability of big players, especially in two wheeler space as they might be close to getting their mojo back.

The problem with PE ratio is that it not only creates a mirage in terms of buying of a stock. But even selling stocks just because P/E is high is also something which leads to selling wealth creators early and then regretting or buying them at a point when they are expensive in real terms. So it is better to use peg ratio, which comes with its own challenges, which are still worth taking.

TIMB, LMB and BBSI made it to the Zacks Rank #1 (Strong Buy) growth stocks list on November 17, 2023.

It makes sense to pay more for a stock whose earnings grow at a faster rate. Now, how much more should be paid would be determined by dividing a company’s PE multiple with its growth ratio. But growth is a function of many variables and that is the challenge which one needs to navigate. But the effort saves trouble which many may face later on. Especially in sectors like banking and financial services which have large numbers of stocks which on face of it appear cheap but are actually not.

Given the fact that it is one of the easiest to calculate and understood by the majority of investors. Whether it is an analyst report or company’s presentation, it is very likely that price earning (P/E ) ratio might have been used to justify either a buy or sell recommendation. But there is a better ratio than this P/E, that is the PEG ratio. PEG ratio is a complex process and comes with its own set of challenges. However, even with these challenges, it is worth looking at PEG ratio before taking a long term investment decision.