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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: staring who wrote (58239)	10/21/2016 1:20:21 AM
From: Paul Senior	Read Replies (1) \| Respond to of 78751

I like the approach you use, staring. 1. Nice way to normalize the eps. My go-to website to get annual roe numbers has changed, and I haven't been able to get those annual figures quickly anymore. (I have to do the calculations myself or will have to buy from a website (like Gurufocus), if I want those numbers.) 2. You're the only other guy on the thread (besides me) that I'm aware of who seems to use net income margin for what seems an integral part of analyzing stocks. I use average NIM over ten years (somewhat sometimes weighted to the most recent five years). I don't convert NIM to get an earnings number and then a p/e and then make a judgment if that p/e is acceptable for a buy. Rather, I look at NIM directly and decide what p/e I'm directly willing to pay for that margin. Your method might be more analytical and better. obrigado!

To: staring who wrote (58239)	10/21/2016 6:34:21 PM
From: Graham Osborn	Read Replies (1) \| Respond to of 78751

Wow, this is quite detailed. For myself I pretty much ignore earnings unless the capitalization is very simple. I find that companies are so different that trying to compare earnings reporting between them is rarely apples-to-apples. FCF is the gold standard but requires even more custom work. So I typically graph rev, tangible book, and LT debt for as far back as I can get them. If over that length of time the company has great earnings but the tangible book is going nowhere, I figure the earnings are probably a wash. Conversely sometimes you have companies that drown their earnings in depreciation for tax purposes but steadily accumulate surplus. I'm not a big fan of averaging operating results unless the metric truly appears stable over a span of decades.