![Comparing Trailing vs. Forward P/E Ratios: Which Predicts Stock Returns Better? P/E](https://markettechguru.com/wp-content/uploads/2024/04/street-statistics-debt-loss-globe-600x400.jpg)
Comparing Trailing vs. Forward P/E Ratios: Which Predicts Stock Returns Better?
In the realm of value investing, savvy investors often seek out undervalued gems by categorizing stocks into quartiles based on their Price-to-Earnings (P/E) ratios. Their strategy typically involves honing in on stocks with the lowest P/E ratios, operating under the belief that these stocks tend to outshine their counterparts with higher trailing P/E ratios. Conversely,…