UK Market Valuations Using EV/EBIT, P/E, And P/BV

In Which Direction The UK Market Should Go? by Bargain Value

Today, we would like to compare the historic level of a few indicators (EV/EBIT, P/E, P/BV) with a current value of them and try to figure out, what that mean for the UK market. We have tested three of them earlier, however we have focused on the usefulness for a building of model folio and searching the “pearls”. In this article, we will look at them from the wider perspective and try to establish three things:

• is the market over or undervalued?
• how “strong” is the market?
• is the dividend munificent?

Let’s start with the four, value indicators:

1. EV/EBIT