in the current market session koninklijke philips inc nysephg is trading at 3412 after a 116 increase however over the past month the stock fell by 408 and in the past year by 3839 shareholders might be interested in knowing whether the stock is undervalued even if the company is performing up to par in the current session the stock is currently higher its 52 week low by 437 assuming that all other factors are held constant this could present itself as an opportunity for investors trying to diversify their portfolio with health care equipment  supplies stocks and capitalize on the lower share price observed over the year the pe ratio is used by longterm shareholders to assess the companys market performance against aggregate market data historical earnings and the industry at large a lower pe can either represent a companys poor future earnings potential or a buying opportunity relative to other stocks it shows that shareholders are less than willing to pay a high share price because they do not expect the company to exhibit growth in terms of future earnings most often an industry will prevail in a particular phase of a business cycle than other industries koninklijke philips inc has a lower pe than the aggregate pe of 6794 of the health care equipment  supplies industry ideally one might believe that the stock might perform worse than its peers but its also probable that the stock is undervalued price to earnings ratio is not always a great indicator of the companys performance depending on the earnings makeup of a company investors can become unable to attain key insights from trailing earnings