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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (43530)	7/24/2011 1:10:34 AM
From: Paul Senior	1 Recommendation Read Replies (1) of 78666

Growth rates: And I am still considering my response: Nobody knows the future. It just seems to me though that if somebody says a rather dull-plodder like BK had an historical eps growth rate of 12% and might continue that rate in future, that that could be something that might be plausible - maybe reasonable - just on the face of it (i.e. the trend merely just continues--- given that I don't know enough about the company's future to contradict the assertion). However, BK eps growth rate does not seem actually to have been anywhere near as high as 12% historically (past five years or so). I can accept the continuation of the historical trend a heck of a lot easier than what a few analysts (none of whom I know) seem now to claim about BK - that it will grow eps at 12% -- much higher than it may have grown in the recent past. I have no idea why that higher growth in future or where it might be coming from. Not sure what BK's historical eps growth rate actually is, only that it may be lower, maybe only as much as 6-8%, if that. In which case, saying BK growth rate (eps growth rate) will be 50% higher (i.e. 12%) without great supporting evidence, well imo that is speculative bunk.

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