There is not just one agreed upon PEG formula. There are several. Some use trailing PE; some use forward PE. Some use 1-year projected growth; some use 5-year projected growth. The point of PEG is that a low PE (trailing and/or forward) by itself might not indicate a value stock, but actually a failing company. Since PEG relates the PE to growth prospects, it would seem to be a more, not less, accurate estimate of value than (any) PE alone. You said, "In your experience". How has your experience shown that PEG is worse. I mean it does not require experience to suppose a relationship where two of the three variables (P, E, G) are future guesses might be inaccurate. Could you clarify, please?
There is not just one agreed upon PEG formula. There are several. Some use trailing PE; some use forward PE. Some use 1-year projected growth; some use 5-year projected growth. The point of PEG is that a low PE (trailing and/or forward) by itself might not indicate a value stock, but actually a failing company. Since PEG relates the PE to growth prospects, it would seem to be a more, not less, accurate estimate of value than (any) PE alone. You said, "In your experience". How has your experience shown that PEG is worse. I mean it does not require experience to suppose a relationship where two of the three variables (P, E, G) are future guesses might be inaccurate. Could you clarify, please?