I have been trying out BING by asking various questions.
It simply seems to read all the info online and then homogenizes it all:
(EPS) is one way to measure a company’s profitability, but it is not the only factor to consider when evaluating stocks. EPS can be influenced by accounting methods, one-time events, stock buybacks, and other factors that may not reflect the true value of a company. Therefore, it is important to compare EPS across similar companies in the same industry, and also look at historical trends and market expectations.
Based on EPS alone, some of the highest EPS stocks in the US market are Berkshire Hathaway Inc., NVR Inc., Amazon.com Inc., Booking Holdings Inc., and Alphabet Inc.1. However, these stocks also have very high prices, ranging from $3,000 to $400,000 per share1. A better way to evaluate the price of a stock is to use the price-to-earnings (P/E) ratio, which divides the stock price by the EPS. The P/E ratio tells you how much you are paying for each dollar of earnings. A lower P/E ratio means a cheaper stock, relative to its earnings.
Some of the lowest P/E stocks in the US market are GameStop Corp., Ford Motor Co., General Motors Co., Micron Technology Inc., and Applied Materials Inc.1. However, these stocks also have low or negative earnings growth, which means they may not be able to sustain their current earnings or increase them in the future. A better way to evaluate the growth potential of a stock is to use the PEG ratio, which divides the P/E ratio by the expected earnings growth rate. The PEG ratio tells you how much you are paying for each unit of earnings growth. A lower PEG ratio means a more attractive stock, relative to its growth.
Some of the lowest PEG stocks in the US market are Facebook Inc., Apple Inc., Microsoft Corp., Netflix Inc., and Adobe Inc.1. These stocks have high earnings growth rates, which means they are expected to increase their earnings significantly in the future. However, these stocks also have high valuations, which means they are already priced for perfection and may not have much room for error. A better way to evaluate the risk and reward of a stock is to use the Sharpe ratio, which measures the excess return per unit of volatility. The Sharpe ratio tells you how much return you are getting for each unit of risk. A higher Sharpe ratio means a more efficient stock, relative to its risk.
Some of the highest Sharpe stocks in the US market are Costco Wholesale Corp., Starbucks Corp., Nike Inc., Home Depot Inc., and McDonald’s Corp.1. These stocks have consistent and stable returns, which means they are less affected by market fluctuations and uncertainties. However, these stocks also have low beta, which means they are less responsive to market movements and may not capture the full upside potential of the market. A better way to evaluate the diversification and performance of a stock is to use the alpha, which measures the excess return over a benchmark. The alpha tells you how much value a stock is adding or subtracting from the market. A positive alpha means a superior stock, relative to the market.
Some of the highest alpha stocks in the US market are Tesla Inc., Shopify Inc., Square Inc., Zoom Video Communications Inc., and PayPal Holdings Inc.1. These stocks have outperformed the market by a large margin, which means they have generated exceptional returns for their investors. However, these stocks also have high volatility, which means they are subject to large price swings and may not be suitable for risk-averse investors. A better way to evaluate the suitability and preference of a stock is to use your own criteria, such as your investment goals, time horizon, risk tolerance, and personal values. There is no one-size-fits-all answer to the question of what is the best priced stock, as different investors may have different opinions and expectations.
I hope this information helps you understand some of the factors and ratios that can be used to evaluate stocks based on EPS and other metrics. However, please note that this is not investment advice and you should do your own research and consult a professional financial advisor before making any investment decisions. Thank you for using Bing.
