re: please explain for jermaynew A good way to get this in some...

re: please explain for jermaynew A good way to get this in some sirt of perspective is to use the PEG ratio, which divides the PE by the annual % increase in eps.

The result is a "figure-of-merit", which allows us to compare shares from widely different businesses. The usual rule is that a figure of 1.0 represents fair value; 1.5 means the stock is overpriced; 0.5 is underpriced; less than 0.5 is a screaming buy.

Usung Paul100's figures for earnings and PE, we get figures as follows:

Year-on-year PEG ratio

04-05/05-06 .28
05-06/06-07 .25
06-07/07-08 .25
07-08/08-09 .25

When you add in the strength and reliability of the earnings stream, the picture looks rather good!

Hence the interest.

Regards, Prime