Sentences with phrase «pe multiples»

These stocks often trade at very high PE multiples but once their balloon is pierced and the market starts to value them more like other companies, their stock price can come down in a hurry.

Stocks can see their PE multiples expand and contract in a manner that has almost nothing to do with changes in EPS, which makes looking at these metrics a poor indicator of valuation or future returns.

If accounting earnings actually drove valuations, then companies with high EPS growth should command higher multiples, and companies with low or negative EPS growth should have lower PE multiples.

Based on the PE multiples of regional banks it is probably worth about $ 4.4 billion.

Then I look at the market capitalization of similar publicly traded firms and similar industry PE multiples.

«Throughout Facebook's entire history as a public company, it's been valued as a high premium - PE multiple» Nygren said.

For that reason, investors need to be looking at ROIC rather than EPS, and they need to recognize that a PE multiple tells you next to nothing about the actual value of a stock.

That article is incorrect about the 26x PE multiple.

The discounted cash - flow process solves what a firm's shares should be trading at — it represents the multiple that is applied to the company's earnings: the PE multiple.

The discounted cash - flow process is also going to uncover situations where the health of a firm's balance sheet will impact the correct PE multiple to place on a company's earnings stream.

At this point, we hope that we have at least convinced you to be careful about arbitrarily placing a PE multiple on a firm's earnings to arrive at a target price (fair value).

In order to uncover which PE multiple is most appropriate to place on a firm's earnings stream (its net diluted earnings per share), we must use a discounted cash flow process.

The net balance sheet position is captured in a discounted cash - flow process, but it is not readily apparent in any PE multiple assessment that only considers a firm's stock price and its earnings per share.

In short, the stock is currently trading below its historical PE multiple, which suggests that right now the stock is relatively cheap compared to how the market has historically valued it.

This valuation looks inexpensive on an absolute basis, and especially when we factor in the high earnings growth expectations: With a PE multiple of 15.6 and an expected EPS growth rate of 21 % Lowe's trades at a PEG ratio of just 0.74.

For example, if the best company in the industry had a PE multiple of 20 times and the worst a PE multiple of 10 times, then an average company in the industry might have a 15 times PE multiple.

Higher earnings, all else equal, means a declining PE multiple and vice-versa.

In the early 90's we can see that stocks benefited from falling yields (higher bond prices) which drove up the PE multiple for bonds and made stocks relatively more attractive in comparison.

Assume you have a buisness which typically trades at an average 20 PE multiple.

The nice thing about gold, it has no PE multiple.

It is an interesting case study because, as identified in the article the current PE multiple is 32x and «If one assumes that the business operations over the next 21 years are much like the last (which we think is reasonable), then returns are going to be much lower without a further re-rating.»

And the tobacco stocks actually started out on a PE multiple, believe it or not, of 5 times, close to the peak of what we know was the S&P 500 bubble in the» 99 - 2000 period.

Not exact matches

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.

With R&D expense recognized immediately and capital expenditures being amortized over multiple years, I would argue that today's companies demand higher PE ratios vs the industrial high CapEx companies of 100 years ago.

Comparing PE (price - to - earnings) multiples for companies in the same sector helps investors make sound investment decisions.

«Ongoing setbacks remind the market that LLC is not a market multiple business (LLC PE is 13.2 x trading at a 25 per cent discount to the industrial x financials which we believe is fair).

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).

First, it's great for investors to have an idea of what «multiple range» a company has traded at in the past — there's a lot of value to this, and most relevant for cyclical firms (mainly industrials) that may, from a fundamental standpoint, exhibit similar (but not identical) patterns with respect to both earnings and their PE through the course of each economy cycle: think Boeing (BA) and the commercial aerospace cycle; Ford (F) and consumer demand for auto sales; or United Continental (UAL) with respect to premium air travel demand.

Well, the truth is that the PE ratio is not as simple as you think (and even some of the most seasoned investors continue to use this powerful multiple incorrectly).

Multiple learning areas that involve physical activity (such as Design and Technology or PE) can lay claim to this.

Many of the titles screened will have multiple subject connections and additional links to the areas of PSHE, Citizenship, PE, ICT, DT, Art & Design and RE.

Right now we are sharing art, music and PE teachers with multiple schools that they have to work with, so that the child is not really being taught, the whole child, with social - emotional learning.

How do you secure a playground, a PE field, a campus with multiple buildings?

Please note that we did run a multiple regression analysis on all of the factors (please see the original study); it turns out that the Shiller PE is collinear with the other metrics, and also statistically insignificant, so we excluded it.

This above - average forecast growth rate can be purchased at an approximately average market multiple PE of 15.8.

When this happens (all business cycles eventually do come to an end) we'll be left with double valuation headwinds: falling earnings forcing high valuation multiples higher and higher stock / bond relative PE ratios.

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.

Since the price / earnings (PE) ratio is the most commonly used, we'll deal with that, though what we're going to talk about applies to all valuation multiples.

Can you name any shares on the NYSE or NASDAQ that are trading at a PE or FCF multiple of 5, let alone 1.3?

You might use multiples such as the PE ratio and Price - to - book ratio to determine is a company is cheap (relative to peers) and then screen for high performers.

Based on a recent stock price in the $ 100 - $ 101 per share range, the company boasts a dividend yield of 2.7 % and a PE (price to earnings) multiple of 19.26.

Yes, possible the «Multiple» declines — re: PE / 10, or even... re: inflation itself -LRB-... would the market trade at 15 - 20x, in a high inflation world?)

re «b)»: So what you're saying is that the Shiller PE of a single stock is no better than the «single year multiple»?

And for what it is worth, if 2008 earnings are excluded from the Shiller PE, the multiple goes to about 20x.

About the Author: David Hunt, PE is a Mechanical Engineer with a background in multiple industries, but predominantly in plastics.