While the P/E ratio is Wall Street's most common measurement for knowing whether a stock is cheap or expensive at the moment, it isn't always the best one. In this video, Motley Fool consumer-goods analyst Blake Bos looks at Sirius XM (NASDAQ:SIRI) and tells investors why its normalized P/E ratio is much higher than it looks. And at that high multiple, Sirius is priced as a growth company, but with its moat eroding as Internet radio becomes more competitive in automobile ecosystems, it may not be the growth story it once was.
Blake Bos and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.