How To Choose Stock Market And Market Share?

　 After more than two years of adjustment, the market average price earnings ratio has dropped to about 30 times, and the share price of some listed companies has also been approaching the net assets per share. From the historical data comparison, the average price earnings ratio of Shanghai stock market is also 29 times that of the two wave bull market launched since 1996, which is close to the current 30 times earnings. The Shanghai and Shenzhen two cities A stock market net rate index below 1.50 times the number of listed companies also reached more than 60. That is to say, the current P / E ratio and the market rate are at the bottom of the history. With the increasing popularity of the value investment concept, investors can dynamically refer to the above two important indicators, looking for low risk and high return security stocks in the seemingly dangerous market.

P / E is the ratio of company's share price to earnings per share. The index is one of the bases for judging whether the stock has investment value. Such as Changan automobile, Shanghai automobile and other first half of the big bull stocks, the beginning of the price earnings ratio is less than 15 times. On the contrary, after the white household appliance industry has entered a stable development period, its overall performance is much worse than before, though the P / E ratio is also obviously low. Obviously, what is most needed in the securities market is the huge imagination space for the expected growth of performance. Therefore, while choosing low price earnings ratio, besides paying attention to its industry cycle, we should also study the "gold content" of low price earnings ratio stocks.

The market price ratio refers to the ratio of share price to net asset per share. The market price ratio (PB) means the premium of the share price relative to the net asset value per share. PB=1 indicates that the stock price has returned to the net asset value per share; PB<1 indicates that the share price has fallen below the net asset value per share. Relative to net profit, net asset value can reflect the overall strength of the enterprise, and it is more reliable to reflect the intrinsic value of the enterprise with the market rate index.

Value based institutional investors in mature markets tend to choose stocks with absolute investment value through the comparison of market rate. One important reason is that there are a large number of stocks with PB or less than 1 in the market. Because of the inherent defects of the domestic market, the overall pricing mechanism is highly distorted, and the stock with PB close to 1 is very limited. From the top 20 cases of low PB stock, 15 are held by funds and brokerages, of which 9 are heavily loaded or additional positions, indicating that low PB stocks are favored by most institutional investors. Some stocks such as Jilin Electric Company, Songshan and Shaoguan Iron and Steel Co., Ltd. are good investment varieties. While paying attention to the market rate, we must also pay attention to the assets quality of these companies. There are two main indicators: first, asset liability ratio, the first is the proportion of guarantee amount to net assets. These two indicators are the key to measure whether the net assets of some companies are over shrinking in the short run.

Overall, stocks with low price earnings ratio and low market capitalization are still dominated by low price large cap stocks.