Low price-earnings ratio effect

Definition:

The tendency of portfolios of stocks with a low price-earnings ratio to outperform portfolios of stocks with high price-earnings ratios.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Dedicated capital

Total par value (number of shares issued, multiplied by the par value of each share). Also called dedicated value.

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