The PE Ratio: A Stockpicker's Secret Sauce or Recipe for Disaster? When evaluating stocks, investors often fall prey to the tyranny of nominal share prices.
This was illustrated recently by Jim Cramer when he compared SanDisk Corporation (NASDAQ:SNDK) and MongoDB, Inc. (NASDAQ:MDB).
By focusing on absolute dollar values, investors can ignore a company's fundamental drivers of value – its earnings per share (EPS).