Question

Why do low price-earnings stocks trade cheap in the market?

Answer 1

low price to earning stocks trade cheap in the market because there is not enough interest among the investors for such stocks which are continuously reporting lower earnings.

companies which are continuously reporting earnings on the higher side, are always preferred by investorseven if they are trading expensive, so the expensive company gets more expensive and the cheaper company which are reporting low profit would get more these companies are always the avoidable by investors so they are always trading cheap.investors field that these companies does not have a better growth trajectory and an optimum strategic plan to gain the market share, so they are the laggard in their particular sectors and they are avoided by the investors.