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Price Earnings Ratio Explained
Price earnings ratio (P/E) is one calculation used to value a stock. The P/E ratio gives a snapshot of how a stock is performing in relation to the stock market or its industry. Do you know how to use it to your advantage?

http://www.bellaonline.com/articles/art14035.asp

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***The P/E ratio of the U.S. period is considered to average at 15. A lower P/E is considered a good time to buy in to stocks. A higher P/E indicates that stocks are getting too rich. Even with a high P/E, the stock market can continue to climb and gain for quite a while.***

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