What does P/E ratio tells about a stock? Should you buy low P/E stocks or avoid? Find out
In general, low P/E stocks tend to be less risky and more defensive in nature, which provides stability during periods of market volatility. There are a number of benefits to investing in low P/E stocks, including the potential for higher returns, lower risk and increased stability. However, investors should carefully analyze and understand why a company is low at its price-to-earnings ratio.
According to Siddharth Oberoi, founder, Prudent Equity, the thinking behind the strategy is that stocks with low P/E are undervalued and have the potential to generate higher returns. Pic: Pixabay