Bespoke: Sector PE Ratios

Bespoke has a very interesting though short post today showing charts of sector PE ratios in the S&P stocks. I have linked to a couple of the charts but you should click through to the Bespoke site to see them all. The two I have linked illustrate two ways pe ratios can make big changes. One is by having a huge earnings change, in this case lower, which drives the ratio higher even though the stocks are falling in price. The other way is to have relatively stable earnings but a big move in price of the stock. In the case of health care stock prices lower and pe ratio thus moves lower. If you go to their site you will notice the pe ratio of the full S&P has actually increased recently largely because the financial sector is such a large part of the index.