Sentences with phrase «earnings multiples can»

Earnings multiples can fall as easily as rise.

Not exact matches

When you purchase a broad swath of equities, say an S&P 500 index fund, the returns you can expect over the next decade or so comprise four building blocks: the starting dividend yield, projected growth in real earnings per share, expected inflation, and the expected change in «valuation» — that is, the expansion or contraction in the price / earnings (P / E) multiple.

Our 2013 year - end target of 1600 implies a 10 % price return, where most of the appreciation can be attributed to earnings growth of 7 % next year, along with modest multiple expansion from 14.2 x to 14.7 x on trailing earnings, still below an average PE of 16x.

The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, robust revenue growth and notable return on equity.

The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, revenue growth, notable return on equity and solid stock price performance.

At least stocks have fundamentals like revenue, earnings, and multiples you can build a price target around.

A business that can grow intrinsic value at say 12 - 15 % over an extended period of time will create enormous wealth for its owners over time, regardless of what the economy does, or what the stock market does, or what earnings multiples do, etc...

Today, we can comfortably expect 8 - 10 % total returns even without assuming any material increase in price - to - normalized - earnings multiples.

Not only will this improve the value of the business» earnings (and thus the SDE for valuation) but it will demonstrate to buyers that the business can be monetized in multiple channels.

«High multiple stocks can become average multiple stocks at the drop of a penny in expected earnings.

And if you can buy some business that earns high returns on equity and has even got mild growth prospects, you know, at much lower multiple earnings, you are going to do better than buying ten - year bonds at 2.30 or 30 - year bonds at three, or something of the sort.»

This leaves roughly 1.4 % of historical long - term returns which can be attributed to past expansion in the Price / Earnings multiple (i.e. over the past 50 years, prices have grown somewhat faster than the 5.7 % average rate of earnings Earnings multiple (i.e. over the past 50 years, prices have grown somewhat faster than the 5.7 % average rate of earnings earnings growth).

Many times, investors drive up those multiples much faster than the earnings and revenues actually increase, which means that a company whose earnings are growing at 15 % a year can have stock price gains of multiples of that within a year, boosting the investor's short - term performance.

Mathematically, you can fully characterize the total return on stocks with a) earnings growth, b) changes in the P / E multiple, and c) the dividend yield.

As usual, I don't place too much emphasis on this sort of forecast, but to the extent that I make any comments at all about the outlook for 2006, the bottom line is this: 1) we can't rule out modest potential for stock appreciation, which would require the maintenance or expansion of already high price / peak earnings multiples; 2) we also should recognize an uncomfortably large potential for market losses, particularly given that the current bull market has now outlived the median and average bull, yet at higher valuations than most bulls have achieved, a flat yield curve with rising interest rate pressures, an extended period of internal divergence as measured by breadth and other market action, and complacency at best and excessive bullishness at worst, as measured by various sentiment indicators; 3) there is a moderate but still not compelling risk of an oncoming recession, which would become more of a factor if we observe a substantial widening of credit spreads and weakness in the ISM Purchasing Managers Index in the months ahead, and; 4) there remains substantial potential for U.S. dollar weakness coupled with «unexpectedly» persistent inflation pressures, particularly if we do observe economic weakness.

Adjusting for the more than $ 130 per share of net cash, GOOG trades at a below - market multiple of earnings despite its competitively protected business, which we believe can grow at above market rates for many years.

Theoretically, the impact of higher nominal rates and inflation on corporate earnings is ambiguous as multiple transmission channels can work in opposing directions.

So, we can just assume BOH will - at a constant P / E multiple - return earnings yield + 3 % as a stock.

«The later stages of the 2009 — 2017 bull market are a valuation illusion built on share buyback alchemy... The technique optically reduces the price - to - earnings multiple because the denominator doesn't adjust for the reduced share count... Share buybacks are a major contributor to the low volatility regime because a large price insensitive buyer is always ready to purchase the market on weakness... Share buybacks result in a lower volatility, lower liquidity, which in turn incentivizes more share buybacks, further incentivizing passive and systematic strategies that are short volatility in all their forms... Like a snake eating its own tail, the market can not rely on share buybacks indefinitely to nourish the illusion of growth.

In short, we can summarize my point and John's point in two sentences: Mr. Bogle breaks down the total return of stocks to multiple expansion & earnings growth.

But if it can keep growing its earnings as it narrows its GAAP - adjusted losses, its multiples should contract as the stock rises.

Not only can earnings grow in the coming years, but that multiple can expand if Big Blue can maintain the revenue growth it expects to report for the fourth quarter.

The key takeaways are: 1) without using a discounted cash - flow model, the PE ratio that should be applied to a company's earnings stream can never be appropriately calculated, and by extension, 2) when investors assign an arbitrary price - to - earnings multiple to a company's earnings (based on historical trends or industry peers or the market multiple), they are essentially making estimates for all of the drivers behind a discounted cash - flow model in one fell swoop (and sometimes hastily).

If the company plays its cards right, it can continue to build its highly profitable core business while paying down its debt, expanding its earnings multiple and making it an even more attractive prospect for investors.

Owners of growth stocks can be especially vulnerable to a missed quarter, since an earnings miss affects both the «E» in the P / E ratio and may also lead to a lower multiple.

To make a plausible case against these expectations, one can't simply trot out an expected forward operating earnings number, multiply it by an arbitrary forward multiple, and claim that stocks are reasonably valued.

Across the globe, the majority of the performance gap between value and growth can be attributed to the higher price / earnings (P / E) multiples of growth stocks.

You can think of the multiple as being something like a price - to - earnings ratio, with price replaced by enterprise value and earnings by EBIT.

It is also misleading to write - off high multiple stocks as not being value opportunities — there are some businesses with growth rates and returns on incremental invested capital that can more than justify an optically high earnings multiple.

Bogle has typically used dividends as a fundamental, but sales and smoothed measures of earnings can also be used, provided that the corresponding valuation multiples are used.

Going back to our premium spread chart we can see that the shiller PE to Bond PE ratio is still near record lows, despite earnings multiples being near record highs.

In addition, our Savings Calculator can help you calculate your projected earnings on multiple deposits or accounts with us!

Now consider the growth stock: It actually ends up delivering a consistent 15 % annual gain in revenue & earnings — based on that performance, your fair value estimate rises accordingly & we can be pretty confident the market's happy to maintain or increase its valuation multiple.

And if the business can be built back up to 2007 earnings levels, $ 1.42 per share (yes, that included the coal and minerals operations which have since been sold) and we ascribed a 10x multiple we might be looking at over $ 14.00 a share in market value, not a bad potential upside.

The question can be answered by converting the cap rate to an earnings multiple.

Essentially, when you value a company, the enterprise multiple is the price you pay and the operating earnings is the income stream you receive, which can be allocated to dividends, investing and buying other stocks.

When you spread your spending among multiple cards it can dilute your earnings.

Companies that grow their earnings rapidly can justify high P / E multiples, but in general they need to grow earnings more rapidly than their P / E ratio expressed in percentage terms.

This leaves roughly 1.4 % of historical long - term returns which can be attributed to past expansion in the Price / Earnings multiple (i.e. over the past 50 years, prices have grown somewhat faster than the 5.7 % average rate of earnings Earnings multiple (i.e. over the past 50 years, prices have grown somewhat faster than the 5.7 % average rate of earnings earnings growth).

While price risk can not be eliminated altogether, it can be lessened materially by avoiding high - multiple stocks whose price — earnings ratios are subject to enormous pressure if anticipated earnings growth does not materialize.

The higher and more consistent the growth in revenue & earnings (watch out for any disconnect between the two), the higher the multiple you can apply — of course, the more erratic they are, the lower the multiple.

As for earnings, we can't assume the same trajectory going forward, but looking ahead to consensus estimates a 20.0 Price / Earnings multiple (based on FY - 2015 adjusted diluted EPS) does appear juearnings, we can't assume the same trajectory going forward, but looking ahead to consensus estimates a 20.0 Price / Earnings multiple (based on FY - 2015 adjusted diluted EPS) does appear juEarnings multiple (based on FY - 2015 adjusted diluted EPS) does appear justified:

But if companies can show that they have adequate control over their financial results such that they forecast future earnings and they honestly come to pass, investors will think the place is better managed than most, and reward it with a higher P / E multiple.

4) Take owners earnings (one can adjust for one - offs that have been recurring, ads, R&D etc) and apply a multiple (5 - 10 yr fwd) you feel is right (requires very strong company / sector knowledge / feel and lots of experience)

Bottom line: Investors can access a portfolio of 25 top P&C insurance companies trading at below average earnings multiples with the PowerShares KBW Property & Casualty Insurance Portfolio at a cost of just.35 % per year.

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America's future belongs to those who can sustain the highest price to earnings multiple on a stock.