Ranking P/E Predictor Factors In Tehran Stock Exchange With Using The Harmony Search Meta Heuristic Algorithm

Subject Areas : Journal of Investment Knowledge

Mozhgan Safa ¹ (P.h.d student, department of accounting, Kashan Branch, Islamic azad University, Kashan, Iran)
Hossein Panahian ² (Associate Professor, department of accounting, Kashan Branch, Islamic azad University, Kashan, Iran(corresponding author))

Received: 2017-05-10 Accepted : 2017-09-18 Published : 2019-03-21

Keywords: price to earnings ratio (P / E, Financial Ratios, HS (Harmony) algorithm (HS), Ranking,

Abstract :

The price to Earnings ratio (PE) is one of the oldest and most commonly used tools for stock valuation.  Although P / E calculation is very simple, its interpretation is practically difficult. In certain circumstances, this is a very rational ratio, and at other times it is completely meaningless. Hence, investors often use this term incorrectly and in their decisions weigh too much. The important thing that can help investors analyze this ratio is to pay attention to the criteria approved by financial experts. Based on the analysis of financial ratios, there are various methods and techniques for determining the factors affecting the price / profit ratio (P / E) of stocks .One of these methods is to use the key variables of the company and its fundamental analysis .In this research, the Harmonic Cross-Innovative Algorithm (HS) has been used to examine the effective measures on the P / E ratio .For this purpose, a sample of 87 companies during the 10-year period (2006-2015) was selected from listed companies in Tehran Stock Exchange . By studying theoretical fundamentals and research background, 27 financial variables that were effective on the P / E ratio were selected. The outputs of the Harmonic Ranking algorithm showed that stock returns, P / B and P / S ratios had the highest impact and coin prices had the least effect on P / E ratios, respectively.  

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