PEG ratios (P/E ratio/growth rate) are a good way of analyzing valuations for growth companies. A company with a high P/E ratio becomes more attractive if it has a high growth rate, and the PEG ratio is an easy way to compare these two characteristics across a basket of stocks. Generally, a PEG ratio below one is seen as positive.
The majority of names in the Nasdaq 100 are still considered "growth" companies, and below we highlight the stocks in the index with the lowest estimated PEG ratios based on P/E and growth estimates for 2009. We also provide each stock's year to date percentage change and estimated P/E ratio for 2009. As shown, Flextronics (FLEX) has the lowest PEG in the Nasdaq 100 at 0.20. This means its growth rate is five times its estimated P/E ratio. Other notable stocks on the list include Foster Wheeler (FWLT), eBay (EBAY), Research in Motion (RIMM), Garmin (GRMN), Google (GOOG), First Solar (FSLR), Dell (DELL), Adobe (ADBE), and Wynn Resorts (WYNN).
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