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Factor share |
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Factor shareThe fraction of payments to value added in an industry that goes to a particular primary factor.Similar MatchesFactor mobilityFactor mobilityThe degree to which a factor of production, such as labor or capital, is able to move, either among industries or between countries, in response to differences in its factor price, thus tending to eliminate such differences. Price earnings growth factorPrice earnings growth factorThe PEG of a company is calculated by dividing its prospective P/E ratio by the estimated future growth rate in earnings per share of the company. So to calculate a PEG, you first need to calculate its P/E ratio.P/E = current share price divided by earnings per shareA company with a share price of 100p and earnings per share of 5p has a P/E ratio of 100/5 = 20.By itself the P/E ratio is a useful ratio because it shows how many times the current earnings the shares cost - in a sense, how many years you would have to wait to get your money back if the company paid out all its earnings to shareholders. But the limitation of the P/E ratio is that it looks at historical information and does not relate the price of the shares to its future performance. The PEG ratio builds in that extra layer of sophistication.Using the example of the same company, imagine that the consensus brokers' forecast for its future earnings growth rate is 15%.PEG = P/E divided by estimated future growth rateFor this company, the PEG would be 20 divided by 15 = 1.33.According to Jim Slater, the investor who popularised the use of PEG's as a stock share selection tool, a share with a PEG of 1 or lower is attractive. Put simply, the lower the PEG, the less you are being asked to pay for estimated future earnings. Jim Slater did not recommend use of the PEG as the only criteria of share selection. There are plenty of other fundamental checks that have to be made too.Note that the estimated future earnings are a critical part of the PEG calculation, and that if the forecasts made by brokers are wide of the mark, the PEG ratio will be unreliable. Because of this danger, most advocated of PEG's recommend using consensus forecasts, rather than the forecasts of any single broker/analyst. Factor content pattern of tradeFactor content pattern of tradeThe trade pattern of a country or the world, focusing on factor content of the goods and services that are traded, as opposed to the commodity pattern of trade. Annuity factorAnnuity factorPresent value of $1 paid for each of t periods. Factor accumulationFactor accumulationAn increase in the quantity of a factor, usually capital or sometimes human capital. Further SuggestionsFactor analysisNet benefit to leverage factor Factor intensity uniformity Factor movement Scarce factor Factor Abundant factor One factor APT Amortization factor Factor price equalization Factor proportions Footloose factor factoring Factor abundance Total factor productivity Factor price frontier Factor scarcity Factor portfolio Factor augmenting Factor of production Pool factor Specific factor Reported factor earnings factor Maturity factoring |
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