Lynch's PEG
EliteGrowth at a reasonable price — the PEG ratioThe PEG ratio (Peter Lynch, One Up on Wall Street) divides a stock's P/E by its earnings-growth rate, so a fast grower can carry a high P/E and still look cheap. We use Yahoo's published PEG when present and positive, otherwise compute it as trailing P/E ÷ growth-percent. Names with no earnings (no P/E) or negative growth have no meaningful PEG and are left off the list. A low PEG is a starting point for research, not a verdict; cross-check the growth assumption. Not investment advice.
How it works
Peter Lynch's complaint about price-to-earnings was that it tells you nothing on its own. Forty times earnings is cheap for a company growing fifty percent a year and ruinous for one growing five. So divide the multiple by the growth.
Below 1 is the rule of thumb: you are paying less in multiple than you are getting in growth. Around 1 is fair. Well above 1 means the growth has to arrive exactly on schedule for the price to make sense.
When it misleads
The growth number is the weak link. It looks backwards, and a company coming off a depressed year prints a spectacular rate that will not repeat. A startlingly low PEG is more often a fluky base year than a bargain.
It breaks entirely on companies with no earnings, and it flatters cyclicals at the top of their cycle — which is precisely when they are most expensive.
| # | Ticker | PEG | P/E | Growth % | Verdict |
|---|---|---|---|---|---|
| 101 | ASML | 0.71 | 35.04 | 135.9% | Undervalued |
| 102 | CHTR | 0.71 | 11.09 | 16.1% | Undervalued |
| 103 | COR | 0.71 | 18.59 | n/a | Undervalued |
| 104 | EXPE | 0.72 | 15.19 | 14.9% | Undervalued |
| 105 | CCI | 0.72 | 35.58 | -10.5% | Undervalued |
| 106 | RVTY | 0.73 | 68.94 | 37.8% | Undervalued |
| 107 | ALGN | 0.73 | 24.21 | 143.6% | Undervalued |
| 108 | GRAB | 0.74 | 34.30 | -32.2% | Undervalued |
| 109 | BSX | 0.75 | 18.04 | -21.5% | Undervalued |
| 110 | PCAR | 0.75 | 19.46 | 43.6% | Undervalued |
| 111 | ENPH | 0.75 | 42.49 | -65.2% | Undervalued |
| 112 | AMKR | 0.76 | 13.23 | 49.0% | Undervalued |
| 113 | EXE | 0.76 | 7.30 | -1.8% | Undervalued |
| 114 | ALAB | 0.77 | 75.25 | 98.0% | Undervalued |
| 115 | ZETA | 0.77 | n/a | n/a | Undervalued |
| 116 | SCHW | 0.77 | 15.64 | 28.6% | Undervalued |
| 117 | APP | 0.77 | 26.34 | 75.5% | Undervalued |
| 118 | FICO | 0.77 | 19.40 | 26.6% | Undervalued |
| 119 | SE | 0.77 | 29.01 | 7.7% | Undervalued |
| 120 | AAOI | 0.78 | n/a | n/a | Undervalued |
| 121 | IT | 0.79 | 13.61 | 612.8% | Undervalued |
| 122 | PSX | 0.79 | 7.88 | 4299.0% | Undervalued |
| 123 | ALB | 0.79 | 23.91 | n/a | Undervalued |
| 124 | META | 0.79 | 20.82 | 264.8% | Undervalued |
| 125 | CRM | 0.79 | 19.55 | 118.9% | Undervalued |
| 126 | NOW | 0.80 | 73.32 | -44.2% | Undervalued |
| 127 | HWM | 0.80 | 40.35 | 49.5% | Undervalued |
| 128 | CBRE | 0.80 | 29.01 | 25.6% | Undervalued |
| 129 | LRCX | 0.81 | 29.86 | 76.6% | Undervalued |
| 130 | CVX | 0.81 | 15.61 | 178.0% | Undervalued |
| 131 | AES | 0.81 | 5.98 | -14.4% | Undervalued |
| 132 | JBL | 0.82 | 24.51 | 88.8% | Undervalued |
| 133 | CI | 0.83 | 12.95 | 10.2% | Undervalued |
| 134 | TXN | 0.84 | 35.89 | 77.0% | Undervalued |
| 135 | MELI | 0.84 | 40.50 | 6.3% | Undervalued |
| 136 | ADM | 0.84 | 13.67 | 671.0% | Undervalued |
| 137 | CPAY | 0.85 | 25.01 | 44.8% | Undervalued |
| 138 | CTSH | 0.85 | 11.81 | 148.2% | Undervalued |
| 139 | OXY | 0.85 | 16.02 | 964.9% | Undervalued |
| 140 | HII | 0.86 | 15.55 | 48.9% | Undervalued |
| 141 | CNC | 0.87 | 23.95 | n/a | Undervalued |
| 142 | MPC | 0.87 | 7.38 | 489.6% | Undervalued |
| 143 | CSCO | 0.88 | 28.17 | 52.1% | Undervalued |
| 144 | AVAV | 0.88 | n/a | n/a | Undervalued |
| 145 | HSY | 0.88 | 20.14 | 111.8% | Undervalued |
| 146 | IVZ | 0.90 | n/a | -1.5% | Undervalued |
| 147 | PRU | 0.90 | 10.86 | -1.2% | Undervalued |
| 148 | CMI | 0.90 | 18.79 | 4.7% | Undervalued |
| 149 | AKAM | 0.91 | 32.31 | -20.6% | Undervalued |
| 150 | BAC | 0.91 | 11.79 | -12.5% | Undervalued |