Not exact matches
As Nicholas Colas of ConvergEx wrote in a Friday note, «Against
measures of long - term
earnings power, the S&P 500 is clearly expensive at 25 (times) trailing 10 - year
earnings.
Earning
power will not necessarily be evidenced by
earnings as reported for accounting purposes, but might also be
measured by increases in unrealized, and therefore unreported, appreciation (e.g., St. Joe Paper), by increased cash flows (e.g., Forest City Enterprises), or by a company becoming an attractive sales, merger or acquisition candidate (e.g., Constellation Bancorp).
Focus on the quantitative
measures of value of existing assets and current
earnings power
It completely subsumes the
earnings based
measure, and has significantly more
power than the
measure based on free cash flows.
If the DNA meter says you're a has - been, then all the traditional
measures of growth and
earnings power lose their potency.