Numerous websites offer historical data onP/E ratios

The Motley FoolFebruary 10, 2013 

Where can I look up historical price-to-earnings (P/E) ratios online? – D.L., Columbus, Ind.

It’s good to seek out such numbers, because when you compare them with a company’s recent P/E, you can get a rough sense of how overvalued or undervalued it might be. The ycharts.com website will give you several years’ worth of P/E numbers.

Our own website offers companies’ five-year high and low P/Es. To reach them, visit caps.fool.com, enter the ticker symbol in the search box near the top, and on the stock’s main page, click on “Ratios.”

At Morningstar.com, enter the ticker symbol to get to a company’s page, and then click on the “Valuation” tab. You’ll get the current P/E, the average P/E for the company’s industry, the S&P 500’s current P/E and the company’s five-year average P/E. There’s even a “forward” P/E that’s based on expected earnings over the coming year.

Should I want to see a lot of cash on a company’s balance sheet? – C.Y., Miami

It depends. When a company has gobs of greenbacks, it can act quickly when opportunities arise. But many successful companies purposefully maintain low cash balances. They use their money to pay dividends, buy back shares (essentially retiring them), and acquire other companies, among other things. If they suddenly need some cash, they draw on lines of credit.

You might be surprised at just how much cash some companies have in their coffers. Recently, for example, Google had more than $48 billion in cash and Microsoft more than $66 billion. General Electric had more than $85 billion. McDonald’s had just $2 billion, though, and Disney less than $4 billion. Companies manage their cash in different ways, with varying degrees of success.

My Dumbest Investment

My dumbest investment was to buy shares of Rambus at its all-time high on margin due to an early morning phone call to my house from a high-pressure “financial adviser” from my full-service brokerage. He told me a court decision was ready to be announced and this baby was set to pop! I was so clueless I gave him the green light, only to see the stock plummet that very same day.

I became pretty mad and woke up to the fact that I needed to take the reins of my financial future. I closed my account and stayed out of the game until I found the Motley Fool and learned more. It was a hard lesson learned, but a valuable one. – B.M., Queretaro, Mexico

The Fool responds: Occasional errors are inevitable, but your story offers several red flags: Be wary of anyone pressuring you to buy an investment, as he or she may be compensated based on that.

Be careful using margin (i.e. borrowing money with which to invest), too, as that can amplify not only your gains but also your losses.

Foolish Trivia

Founded in 1922 and based in Bloomington, Ill., I insure more homes and cars than any other company in the United States, and I’m a top insurer in Canada, too. I was recently ranked in the top 50 of the Fortune 500. You can’t buy stock in me because I’m a mutual company, owned by my policyholders.

I have more than 65,000 employees and some 17,800 agents and handle almost 35,000 claims daily, serving 81 million policy and account holders. I offer banking services and mutual funds, too. A safety advocate, I helped pass several seat belt laws. Who am I?

Last Week’s Trivia Answer: I trace my history back to 1845 in Cincinnati, when a Swiss immigrant carriage-maker made a billiard table.

I later moved into the world of bowling, and introduced a rubber bowling ball in 1906 and an automatic pinsetter in 1956. Today I’m a leader in boats, fitness, bowling and billiards, and offer everything from game-room furniture to cardio equipment to boat-piloting joysticks.

In 1946, I commissioned a fortune-telling device in the form of an eight-ball – the Magic 8 Ball rights are now owned by Mattel. In 1972, one of my engineers invented the Air Hockey game. Who am I? Answer: Brunswick

Reach the Gardners at fool@fool.com, or Motley Fool, 1130 Walnut, Kansas City, MO 64106.

The News Tribune is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service