Multiples are a key part of fundamental analysis used in stock picking. There is some debate over which multiples are best, or whether any of them are really useful. I put data for seven multiples into a spreadsheet for 33 of the highest market cap stocks traded on US exchanges. (I attempted to analyze the highest market cap stocks, but a a few were excluded because incomplete data was available for them.) I obtained the multiple data on Sunday, November 10 (primarily from TD Ameritrade). I calculated the total return (including dividends) supposing someone bought at the opening price on November 11, 2019, and sold at the closing price on August 4, 2020. I then charted the results for each multiple. The results were not promising for people who use multiples to invest. The linear regressions should be expected to have negative slopes, but this was only the case for PEG ratio. In other words, companies with low earnings and low book values had better returns for investors. I think I'll check the returns after a full year before I start buying stock with the lowest earnings I can find.
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