Nice little study Billy. It kind of reminds me of some PE studies that Geoff Gannon ran earlier this year, but on a much more focused universe. 

How did you decide on ROE of 25% as your cutoff?  Why not 20% or 30%?  If you sent me a fax of the trades, would you mind me posting them here or maybe on Fat Pitch Financials?

Billy- Thats a great measuring stick for how strong a moat is. What other criteria do you use?

The PEG Ratio is used to get a better understanding of a company's stocks is price, than the P/E alone. The PEG Ratio uses the P/E Ratio of a company, and compares it with that company's annual growth rate.

To calculate the PEG Ratio of a company, you'll start with the P/E. After you have the P/E Ratio, you'll need to find the company's annual growth rate. Divide the P/E with the growth rate.

How to use the PEG Ratio - The PEG Ratio of a company will be between 0 and 5. The lower the PEG Ratio, the better. A PEG Ratio of 2 or below is considered good. As with the P/E Ratio, never make a decision to buy a stock based soley on the PEG Ratio. Always throughly research a stock before making the decision to buy.

The PEG ratio is a good way to compare similar companies in the same market segment having different growth rates.

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Kevin
http://investnaked.googlepages.com

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