E/P, EPS and REG ratio

midou7172 · 2 May 2013

burglar said:
*gulp*

1. A good company should grow much faster than inflation!
Growth =value, hence people are willing to pay more for a share.

2. Traders watch buying & selling volumes, in those fancy monitors.

A "Value Investor" seeks good companies which are cheap (=Undervalued)
A "Trader" seeks a company with a trending Share Price (rising or falling); when indicators point to a likelyhood that it will continue to trend.

Yes ... they make money in rising markets and in falling markets!!

Very good points. It sounds obvious but for a beginner like me, simple things are not that obvious (sometimes, I am wondering why I am not a blonde but this is a completely different subject).

I was happy to be a just “doing find investor” and then, I thought I could do better. I realize that will be a big journey ahead and somehow overwhelming. Phew~~ too many questions and it is getting embarrassing...

Pragmatic and patience, these should make you a very good trader or whatever you are in.

burglar · 2 May 2013

midou7172 said:
... or whatever you are in. ...

When I arrived in this forum Nov 2010, I thought:
1. I was an investor!
2. I was unsuccessful due to the GFC,
the worst financial disaster since the Great Depression.

I have since learned from forum members that I am a gambler.
I was unsuccessful after the GFC due to gambling.

midou7172 said:
... somehow overwhelming. ...

Take baby steps!
Dovetail what you know to be true,
with what you learn here or elsewhere.

midou7172 said:
... it is getting embarrassing...

No need to feel that!
You are in the beginners lounge, any question is Ok.

midou7172 · 3 May 2013

burglar said:
When I arrived in this forum Nov 2010, I thought:
You are in the beginners lounge, any question is Ok.

Thank you buddy :bier:,
You definitely don't sound like a gambler anymore. I really hope that you are making a lot of money now.

Back to the business, I recapitulated these troublesome jargons in my way. Please, feel free to comment and point me if I am wrong.

1. EPS - Earning Per Share: Company profit divide by number of shares. Bigger the number better it gets (?)

2. E/P - Earning divide by(/) Price: High E/P means high expectation of growth.

3. P/E - Price divide by(/) Earning = earning yield : Not too sure what to looking for..but I guess Higher yield better it is?

4. PEG ratio - Price divide by Earning and divide again by Growth ratio : Apparently it is better when it is low. No idea why...

Hope today is a better day for all of you! Have to do some 'Real' work to pay my bills now.

Cheers,

Klogg · 3 May 2013

midou7172 said:
$2mil in profit, and has 1million shares available = 2mil / 10mil
Do you mean company has 10million shares available? not 1milion?
Cheers,

Sorry, had a typo in there - I did mean 1million.

midou7172 · 3 May 2013

Klogg said:
Sorry, had a typo in there - I did mean 1million.

No Problem~ Although.. you owe me some of my brain cells.

burglar · 3 May 2013

midou7172 said:
... 4. PEG ratio - Price divide by Earning and divide again by Growth ratio : Apparently it is better when it is low. No idea why ...

You now know more about P/E than 90% of the people in your street!

4. The higher the growth, the lower the PEG!
By the way, I hardly never seen anyone use PEG before.

Time to look at a highly successful Tech company. Why not Microsoft Corp, what do you see?
MICROSOFT Key Statistics

midou7172 · 3 May 2013

burglar said:
You now know more about P/E than 90% of the people in your street!

4. The higher the growth, the lower the PEG!
By the way, I hardly never seen anyone use PEG before.

Time to look at a highly successful Tech company. Why not Microsoft Corp, what do you see?
MICROSOFT Key Statistics

Eeeeeuh.....

1. their P/E is actually 17.11 which is higher than Apple Inc.
2. Forward P/E = 10.80. that means... based on their estimate, less growth next year???
3. PEG Ratio: 1.36. Not very good.
4. Their Gross Profit (ttm) is 56.19B and Total Debt (mrq) is 14.76B, Total Debt/Equity (mrq): 19.25. Yeah, why not but Apple has NO debt and 68.66B Gross Profit! But Apple is TOO~~ expensive.

Look! Comutershare Limited.
Gross Profit (ttm): 421.00M
Total Debt (mrq): 1.78B
Total Debt/Equity (mrq): 149.94 That sounds a lot of debt! no?

Sorry, go back to Microsoft Corp.

5. During the last 52 weeks the share price was between $33.17 to $26.26
6. Dividend pay day is 12 Jun 2013 if you have been holding their share at lease since 14 May 2013.

The rest are mainly written in Gibberish to me...

Sir, what am I getting? C, C+?

burglar · 3 May 2013

Another important piece of the jigsaw puzzle is debt.
A company can get money from shareholders.

They can also borrow from a bank.
Trouble with banks is; they want it back ... with interest!

Good companies are either "debt free"
or can manage their repayments.

Bad Companies like Babcock & Brown or ABC Learning
were so highly leveraged they were unable to refinance.
They have trouble meeting the payments, then the interest rates go up.
Next thing - liquidation!

Learn about debt levels in a company and the means to service their debt!

midou7172 · 3 May 2013

burglar said:
Another important piece of the jigsaw puzzle is debt.
A company can get money from shareholders.

They can also borrow from a bank.
Trouble with banks is; they want it back ... with interest!

Good companies are either "debt free"
or can manage their repayments.

Bad Companies like Babcock & Brown or ABC Learning
were so highly leveraged they were unable to refinance.
They have trouble meeting the payments, then the interest rates go up.
Next thing - liquidation!

Learn about debt levels in a company and the means to service their debt!

Hello Burglar,

Did you see my post just before yours? Took a time to write & post it as I am doing this while working.

Will you give me some extra points for the comment I did about Apple & Computershres's debt level?

Looking forward to see my note.

burglar · 3 May 2013

midou7172 said:
... Did you see my post just before yours? ...

No, I took quite some time to write mine!
I even needed a Nanna nap in the middle!

midou7172 said:
... Will you give me some extra points for the comment I did about Apple & Computershres's debt level?

C++

midou7172 · 4 May 2013

burglar said:
C++

Yey, C++!! I am happy with that. Considering that I am learning a lot more and faster during last 3 days from this forum than anything else I tried last 6 months by myself.
What do I have to do to get B now?

I guess “Market Cap” is something I should understand.
To start with, I am having trouble with “outstanding shares” - ‘Also referred to as "issued and outstanding" if all repurchased shares have been retired.’ - Retired??? How shares can be retires???

Below are my NEW troublesome terms:
“float”
“authorized shares”
“Capital Stock”
These are all something to do with “Volume”?

No market today so enjoy outdoor, try to get some vitamin D!!!

burglar · 4 May 2013

midou7172 said:
... “float” ...

Start with "float"

In the begining there is "nothing but an idea".
Alternatively there is a private company.

Next step is to float the company/(idea) on the market in an Initial Public Offering (IPO).

A launch, if you will!!

burglar · 4 May 2013

midou7172 said:
... “authorized shares” ...

"Authorized Shares
Authorized shares refer to the largest number of shares that a single corporation can issue. "

Read more:

burglar · 4 May 2013

midou7172 said:
... What do I have to do to get B now? ...

Step 1. Go to investopedia,
Step 2. Use search facility to find "market cap definition".
Then I will give you a B.

If you use cut and paste, I will give you a B+ :!

PS Hey, I learnt so much!
Re float ... did you mean Float a company or Floating shares, and how they affect volatility

For homework: (note;- another great resource online).
http://financial-dictionary.thefreedictionary.com/Floating+Shares.

midou7172 · 6 May 2013

burglar said:
Step 1. Go to investopedia,
Step 2. Use search facility to find "market cap definition".
Then I will give you a B.

If you use cut and paste, I will give you a B+ :!

PS Hey, I learnt so much!
Re float ... did you mean Float a company or Floating shares, and how they affect volatility

For homework: (note;- another great resource online).
http://financial-dictionary.thefreedictionary.com/Floating+Shares.

Hello burglar,
It is so unfair that you gave me all that homework during the weekend !!
I was busy baking myself under the sun!! I don't know where you are but where I am, we had a BEAUTIFUL weather!!! so no time for homework... That is my excuses. Wasn't that you who were talking about "baby steps"? Yeah~~, that was what I was doing or more like baby naps :

midou7172 · 6 May 2013

burglar said:
Start with "float"

In the begining there is "nothing but an idea".
Alternatively there is a private company.

Next step is to float the company/(idea) on the market in an Initial Public Offering (IPO).

A launch, if you will!!

"Float" sounds like "more risk" to me so far.

burglar · 6 May 2013

midou7172 said:
Yey, get some vitamin D!!!

I'm in South Australia.
Finally, we are getting some mild autumn weather.

Lovely for my flowers!
My thread on flowers!

midou7172 · 6 May 2013

burglar said:
Step 1. Go to investopedia,
Step 2. Use search facility to find "market cap definition".
Then I will give you a B.

If you use cut and paste, I will give you a B+ :!

"Definition of 'Market Capitalization'
The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying a company's shares outstanding by the current market price of one share. The investment community uses this figure to determine a company's size, as opposed to sales or total asset figures.

Frequently referred to as "market cap."

Now B+!! It doesn't mean I understood. So abstract definition... I will have to think about what this means.

burglar said:
PS Hey, I learnt so much!

You see, it is becouse of me you also learn!

burglar said:
Re float ... did you mean Float a company or Floating shares, and how they affect volatility

I am the one who's asking questions. How I am supposed to know which one I don't know?

burglar · 6 May 2013

midou7172 said:
... I am the one who's asking questions. How I am supposed to know which one I don't know?

Float new company ... steer clear. (IMO)
Floating shares, very important, !!

burglar · 6 May 2013

midou7172 said:
... It doesn't mean I understood. ...

If you understand, give youself an A+

E/P, EPS and REG ratio

Similar threads

Privacy & Transparency

Privacy & Transparency