Here is the latest update for October from Validea’s market valuation tool. Rather than focusing on market-cap weighted indexes like the S&P 500, our tool focuses on the valuation of the average stock relative to history. We use the median of our investable universe of 2700 stocks to perform the calculation.
The median stock got a little more expensive in September using the TTM PE, rising from 21 to 21.5.
Using current year earnings estimates, valuations also rose slightly to 17.8. Stocks have been cheaper using this metric 60% of the time historically.
The Price/Sales is one metric where the median stock continues to look very expensive. Higher than normal profit margins are making stocks look more expensive relative to sales.
Further Research
