What is Relative Value?
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Relative Value helps investors determine whether a stock is overvalued or undervalued. Using Value Line data, the calculation compares a stock's current P/E to its five-year average P/E, expressed as a percentage. A Relative Value of 100% or less generally indicates that the stock is reasonably valued.
Think about judging a stock against its own history. Compare today's P/E to its five-year average — around 100% or less suggests it's fairly priced.