DOES PRICE EARNINGS RATIO REALLY MATTER?

Investors who are interested in investing in stocks have to take into account a large number of information in order find the stock that will bring largest return. Generally, each stock has profile available online. In these profiles information about past performance and financial ratios are reported. Among reported data there is always information about price earnings ratio, and this ratio is usually on the top of the list. In this paper we investigate if price earnings ratio is significantly connected with stock performance. [ABSTRACT FROM AUTHOR]