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Specifics and Success of Fundamental Analysis Based on Price Earnings Ratio
Vorek, Marián ; Veselá, Jitka (advisor) ; Musílek, Petr (referee) ; Svoboda, Martin (referee)
This thesis describes fundamental analysis method based on a price to earnings ratio and an effort is put on the following areas: (i) empirical verification of factors determining the price to earnings ratio, (ii) empirical verification of an investment strategy based on historical price to earnings ratios and (iii) behavior of P/Es in bear market periods. The empirical verification of the main factors determining the price to earnings ratio is conducted on empirical data for a sample of eleven stocks listed on Prague Stock Exchange in period 2006-2011. The empirical verification of macroeconomic factors determining the price to earnings ratio as well as the empirical verification of an investment strategy based on historical price to earnings ratios are researched based on empirical data of an equity index S&P 500 in period 1954-2011 and an equity index PX in period 2001-2011. Behavior of P/Es in bear markets is researched on empirical data of index S&P 500 in period 1954-2011 and index PX in period 2001-2011.

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