Using a different ratio to ascertain value: 7 stocks from different sectors that fit the bill, with an upside potential of more than 21%

Time for us to bring the fans of the PE ratio down a PEG or two. The street’s wisdom tells us to assess stocks using the price to earnings (PE) ratio. It’s a simple thing to understand. If the PE is high, avoid the stock. While low PE stocks are the ones to target. But blindly following the PE formula may lead in many cases to lost opportunities in terms of wealth creation. It’s also flawed when it comes to some sectors. A lesser known ratio to use is PEG, or price/earnings to growth ratio. Let’s tell you why.