Investors who pick stocks sometimes rely on PEG ratio to determine if a company is under value. A figure of PE that is below 1.25 times of growth rate would indicate for a greater propensity to grow compare to a company’s forward valuation.
So can we bring this over when looking at country? the folks at Bespoke did the leg work and here are the results. Looks like Singapore and Russia looks “undervalued” due to the estimated growth rate of GDP they are likely to produce going forward. US is expensive due to the low growth rate.
View the chart here.