In this post we review the fair value of sensex based on historical data.
(Re-posted, from 11/Nov/2011)
- 13 – 22 is the broad range (71% of the time, market stays within this range)
- 5% of the time market fell below 13 PE
- 17% of the time it remained below 15
- Average PE for the period is 20.9
- PE of 20, followed by 16 are most common
- EPS growth rate for the period is 14.6%
- BV growth rate is 13.5%
As of 11/11/11 – Sensex was trading at a TTM PE of 18.24. 42% of the time, sensex has traded below this value. Market is slightly undervalued.
