Those holding LPL Financial Holdings (NASDAQ:LPLA) shares must be pleased that the share price has rebounded 32% in the last thirty days. But unfortunately, the stock is still down by 28% over a quarter. But shareholders may not all be feeling jubilant, since the share price is still down 20% in the last year.
Assuming no other changes, a sharply higher share price makes a stock less attractive to potential buyers. In the long term, share prices tend to follow earnings per share, but in the short term prices bounce around in response to short term factors (which are not always obvious). So some would prefer to hold off buying when there is a lot of optimism towards a stock. Perhaps the simplest way to get a read on investors’ expectations of a business is to look at its Price to Earnings Ratio (PE Ratio). Investors have optimistic