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In his excellent book One Up on Wall Street, Peter Lynch, the best mutual fund manager ever, revealed a powerful charting tool that helped him to achieve a gain of 29.2% in his portfolios for 13 years. In this chart, Peter Lynch drew the stock price and the earnings per share together and aligned the value of $1 in earnings per share to $15 in stock price. He wrote in pages 164-165 of the book:
"A quick way to tell if a stock is overpriced is to compare the price line to the earnings line. If you bought familiar growth companies when the stock price fell well below the earnings line, and sold them when the stock price rose dramatically above it, the chances are you'd do pretty well."
This page displays the stocks that are currently traded below their Peter Lynch Earnings Line. According to Peter Lynch, you will probably "do pretty well" with these stocks.
With similar philosophy, we have also created screens to find stocks that are traded below their historical median book value multiples, median sales multiples and median EBITDA multiples.
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