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For Immediate Release
Chicago, IL – October 25, 2018 - Stocks in this week’s article are Guess? Inc. GES, GTx Inc. GTXI, NCI Building Systems Inc. NCS, EMCOR Group Inc. EME and Mitek Systems Inc. MITK.
What Overvaluation? 5 Stocks with Rising P/E Are Good Buys
Wall Street is currently on a tumultuous ride thanks mainly to rising rate worries and this is causing corrections in some high-flying names. But this does not mean that investors should be stricken with overvaluation fears, dump stocks that have seen huge price rise lately and run after value picks only.
Though investors generally believe that the lower the P/E, the higher the value of the stock will be, there is more to this whole P/E or valuation story as not only low P/E, stocks with a rising P/E can also fetch solid returns.
Rising P/E: An Useful Tool
Generally, the price of a stock rallies on a rise in earnings. As forecasts for expected earnings move higher, demand for the stock should drive its price. After all, a stock's P/E gives an indication of how much investors are ready to shell out for every dollar of earnings. Thus, if the P/E of a stock is rising steadily, it means that investors are pinning their hopes on the company’s inherent strength.
Also, studies have revealed that stocks have seen their P/E ratios jump over 100% from their breakout point in the cycle. So, if you can pick stocks early in their breakout cycle, you can end up seeing considerable gains.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/330534/what-overvaluation-5-stocks-with-rising-pe-are-good-buys
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NCI Building Systems, Inc. (NCS) : Free Stock Analysis Report
EMCOR Group, Inc. (EME) : Free Stock Analysis Report
GTx, Inc. (GTXI) : Free Stock Analysis Report
Mitek Systems, Inc. (MITK) : Free Stock Analysis Report
Guess?, Inc. (GES) : Free Stock Analysis Report
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