# peg

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## Pegging

1. The practice of fixing the exchange rate of a currency to the value of another currency. Most countries that peg their currencies do so to the U.S. dollar, though some peg to currency baskets. See also: Fixed exchange rate.

2. The act of buying a security in a large quantity to drive up the price. Writers of put options (and holders of short positions) practice pegging when the expiration date is approaching and it appears that the option will be exercised such that it puts the writer at a disadvantage. The idea behind pegging is to cause the price to rise so the option is not exercised and the writer can profit from the premium.

## Price/Earnings-to-Growth Ratio

A ratio of a stock's valuation, that is, how expensive a stock is relative to its earnings and expected growth. It is calculated as:

PEG = Price/Earnings/Annual Earnings Growth per Share

A lower ratio indicates a less expensive stock with higher earnings and growth, while a higher ratio indicates the opposite. According to Peter Lynch, who popularized the ratio, a fairly priced stock has a ratio of 1.

## peg

1. To fix the price of a new security issue during the issuance period through buying and selling it in the open market in order to ensure that the price in the secondary market will not fall below the offering price. Also called holding the market, price stabilization, stabilize. See also stabilization period.
2. To fix the rate at which foreign currencies exchange with one another.

## Price/earnings-to-growth ratio (PEG).

To find a stock's PEG ratio, you divide the stock's price-to-earnings ratio (P/E) by its projected annual earnings per share (EPS) growth. The result is a rule-of-thumb assessment of whether the stock is overvalued or undervalued.

In brief, if a stock has a PEG ratio of 1, you conclude that investors are paying what the stock is worth based on its P/E and growth potential. If it is higher than 1 -- say 1.55 -- you conclude that investors are paying more than the growth projection justifies. If it is less than 1, you conclude that the stock may be poised to appreciate in value and so a wise purchase.

However, a PEG ratio, by itself, does not provide an adequate basis for an investment decision, any more than a P/E does, because it doesn't take company fundamentals into account. For example, an under-priced stock may be a good buy, but it may also be the sign of a company in poor financial shape or an industry in trouble.

The potentially greater problem is that growth projections, even when they are the consensus finds of professional analysts, are just estimates. That is especially true of estimates that look out five or more years, since there is no way to anticipate the shifting marketplace with real precision. Yet projections based on a single-year's results are notoriously inaccurate.

In short, a PEG ration can be a valuable addition to an investor's toolkit, provided you understand the assumptions on which its components and results are based.

References in periodicals archive ?
Does this mean the stock is overpriced at PEG ratio of 3.
PEG worked with SunFunder on a large multi-currency syndicated loan - an industry first - with participation from six lenders, including SunFunder, ResponsAbility, Oikocredit, Global Partnerships and Palladium Impact Investments.
No reported attempts have so far been made to study the correlation of buccal ectopia of maxillary canine with size of lateral incisors in Pakistani population; therefore objective of this study was to analyze the prevalence and relationship of peg lateral incisors with of BDC.
While maintaining the peg is the most advantageous choice for the GCC countries at present, the demerits of upholding the peg in an adverse environment can't be ruled out.
There have been some studies that examine predictors of early mortality in PEG patients of all causes (but not exclusive to dysphagic stroke patients).
Failure modalities between peg designs were similar for the high density blocks (in which the peg disassociated from the cement in all cases) but different for the low density blocks, where in some cases the substrate failed prior to the peg disassociating from the cement.
Kalanwali (50068 MT Hafed PEG +81000 MT SBS WH PEG + 9000 MT PEG Madhu Gupta)
Table-1 showed the solubility of complex and mixture of hesperidin and PEG 6000.
Placing your hook through the peg you just ended on, take the secondto-bottom band, and loop it to its original peg on the left-hand side.
For this match only, Darlington Brown Trout AC allowed its water above Croft bridge to be used in addition to Thornaby AC's water between Croft and Hurworth, so all anglers were sure of a decent peg.
0 using red maggot and worm on the hook from peg 82.

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