price to earning high EPS low PE ratio Price to earning ratio EPS Earning per share

What is basic rule of Investing in stocks?
The answer may vary from person to person.
Generally the investment is done in stocks having good fundamentals, posted good results and at lower valuations.

There are various ways to analyze the stock/company profile but at broad levels following two fundamental ratios are used
1. Price to Earning ratio - PE ratio
2. Earning Per Share - EPS ratio

1. PE ratio
This ratio is used to find whether the stock is overvalued (highly priced) or lower valued (low priced).
The stock’s value and price are two different aspects.
The stock value is the real value, it’s worth while the stock price is the price on which trading and investing is done.

PE ratio is calculated by dividing share’s closing price by EPS.
It is always advised to invest in lower valuations and growth oriented stocks. So low PE parameter is used to filter the stocks in below tables.

2. EPS ratio
The portion of the company’s profit allocated to each outstanding share of the common stock is called as earning per share (EPS).
It is always good to have a high portion of the profit allocated to each share so it is advisable to invest in high EPS stocks.
So High EPS parameter is used to filter the stocks in below tables

To read more about PE ratio and EPS ratio please visit below link
http://www.stockmarketindian.com/growth_under_valued_stocks.html

Following are criteria’s used to filter the stocks,
1. High EPS - Above 15. EPS used is the sum of last four consecutive quarters EPS.
2. Low PE - 0 to 15 - It is calculated by dividing share’s latest closing price by EPS.

Group A Stocks (BSE)
Group A stocks - Shares in this category have a high Liquidity, high Market Capitalization
and high Capital Appreciation.

1. Stocks in the range of Rs 50 to 100
2. Stocks in the range of Rs 100 to 200
3. Stocks in the range of Rs 200 to 500
4. Stocks above Rs 500

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