The article analyzes the common misconception among new investors that share prices alone can determine whether a stock is cheap or expensive. It introduces the concept of the price-to-earnings (PE) ratio as a crucial indicator that reveals how much investors are willing to pay for every rupee of profit a company generates. A low PE ratio often signifies an undervalued stock, while an excessively low PE might signal business challenges or declining growth prospects, making it essential for investors to consider this metric when evaluating investments.

Five particular companies are spotlighted due to their favorable PE ratios. The first company mentioned is Ashoka Buildcon, which operates in the infrastructure sector with a current PE ratio of 1.6, despite experiencing a 21% revenue drop in the past year yet witnessing an impressive 88% surge in net profit. This contrasting performance raises questions about the company’s future growth potential.

Additionally, the article continues to explore other companies' shares, including REC and BPCL, which are perceived as having attractive valuation metrics based on their respective PE ratios. The discussion highlights the volatility and risks associated with low PE stocks while also emphasizing the importance of investor discernment in identifying which stocks could indeed represent better investment opportunities.