One thing I've noticed about PEGs and YPEGs is they can vary enormously based on which EPS number and which growth rate you use. I purchase a lot of depressed small-cap stocks which often have losses and in which quarterly earnings can vary widely. I sometimes run several PEGs in order to get one which I feel is most representative. I'd like to hear any opinions on the wisdom of the following: (a) Using the revenue growth rate instead of earnings growth. Usually revenue growth is more stable and should provide a more conservative number. Also, companies coming out of financial troubles or just turning the profitability corner often show unsustainable earnings growth. In the long run, I would think revenue growth = earnings growth.(b) For companies with recent losses and/or EPS figues that jump around from quarter to quarter, why not cut a regression line over the past 4 quarters (or more if possible) and use the slope as the growth rate? Most spreadsheets have statistical functions which would make this pretty easy. (c) What about doing a PEG based on each of the past quaterly EPS and using this as a range for what values to expect in the future? (As you can tell, I tend to be more comfortable with more data points.)Anyone?Jack NeefusCollege Park, MD
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