New Delhi, May 29 -- The Price-to-Earnings (P/E) ratio is one of the most well-known metrics that investors use to evaluate whether a stock is overvalued or undervalued. It basically compares a company's current stock price to its earnings per share (EPS), thus facilitating investors with a fair idea of how much they are paying for every Rs.1 of profit.

It is also important to note that this is just one metric; stock and company analysis and investment planning entail a host of other extremely important factors, such as management reputation, P/B ratio, past earnings, future growth projections, restructuring, stability, employee retention, etc.

Therefore, just looking at this metric is not enough to make investment decisions. As an inve...