PE Compression

This information comes to us courtesy of the good people at "Chart of the Day".*

"Today’s chart illustrates that the recent growth in earnings has led to a significantly lower PE ratio. While the PE ratio has been within the confines of a tight and very steep downtrend it is worth noting that the PE ratio has recently edged above this downtrend. Regardless, even though the significant earnings growth of late is a plus, the market has not been willing to pay what it has over the past decade for each dollar of earnings. Stay tuned…Notes:- What are earnings saying about future stock prices? The answer may surprise you. Find out now with the exclusive & highly regarded charts of Chart of the Day Plus."

*Source - Chart of the Day & Standard & Poor's.