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Company valuation

Price earning ratio

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Is there any place where I can find PE ratiosĀ of different UK industries?

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By jonibarnes
04th Aug 2021 15:24

try the Financial Times - old fashioned paper version

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Replying to jonibarnes:
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By Hugo Fair
04th Aug 2021 15:38

But (obviously) be aware that an average value (or, better, range) is only really relevant for larger organisations - particularly those whose shares are traded publicly as per listings in FT.
Conversely, privately-owned SMEs are fairly unaffected by any sectorial P/E figure ... with value being more directly connected to the fit with a prospective purchaser.

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Maytuna
By DJKL
04th Aug 2021 22:34

Be wary of large companies as benchmarks as they

may have a very high PE due to market dominance/strength/moats etc

and

it may be really difficult to determine if they actually do something similar to the company to be valued.

(The number of times I have initially thought I understood what a company did and then really delved into matters and discovered my initial thoughts were nonsense have been numerous- one of the reasons I these days tend not to buy shares in individual companies and favour ITs instead)

I would see if any say AIM listed or fledgling companies could be used for the starting position (simpler business to understand, though often far less information) and then start discounting for lack of marketability and if appropriate lack of control.

An old copy of Hamilton Baynes or Livens might be a good starting point re taking in all the factors that need considered, and do remember to normalise profits if appropriate (e,g. substitute in appropriate salaries re management if say directors currently only take nominal remuneration) Also remember to look at multiple years and consider PEG.

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