High PE Ratio Means What? A Good Stock?

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			            	Manoj Jayale
Manager, India
			            
High PE Ratio Means What? A Good Stock?

	          		What is the meaning if Company A has been trading at a higher PE ratio than company B?

Does it mean we should buy this stock or not?

Can anyone explain? Thanks...
				      
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						            	Rajiv Singh
Student (University), United Kingdom
												
				                Meaning of P/E Ratio

													No, it does NOT mean a good stock, nor a bad one. It just means how much a company is earning per share.

How strong the stock of a company is, also depends upon the volume of stock a company is using to trade.

When the company's P/E ratio is low this means it is generating a low income per share. However, how much total earnings it accumulates can be calculated by:

Earning per share * total volume traded.
				                
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