4 stocks with the right PEG ratio for long-term wealth creation

PEG ratio is a complex process and comes with its own set of challenges. The challenge with PEG ratio is the quality of the earning forecast and given that in an ever changing macro environment , even the best of the forecast for any business can go wrong which may impact other elements which lead to some unexpected changes. However, even with these challenges, it is worth looking at PEG ratio before taking a long term investment decision.

Because it is easy to calculate and understand the valuation ratios, the PE ratio often acts as an anchor when investors are making investment decisions. Given the huge difference in what is value and what looks cheap due to one financial ratio, more often than not, relying on PE may lead to wrong investment decisions.

PE ratio is one of the most overused and misused ratios. It is used by all and sundry to justify their valuations and create a mirage of value. Right from investor presentations to research reports, one finds its mention everywhere. But is this the right matrix to look at ? It is better to use PEG ratio when looking for long-term investment, though finding the right ratio is itself a challenge