Last week, I shared with you one of the techniques that companies use to boost their earnings per share (EPS) results and give the appearance of a business that is firing better than may be the case. Towards the end, I raised the question about what this means for price to earnings (P/E) ratios, which I’m sure you recognize as one of the easiest valuation metrics to use, but also one that is fraught with issues. That’s why in order to get really comfortable recommending a company to subscribers of my PowerTrend Profits newsletter, I need to triangulate the more»
One of the easiest and simplest metrics that investors use to screen for, as well as value, stocks is the price-to-earnings ratio, better known as a stock’s P/E. Of course, on its face, a P/E is nothing more than a snapshot in time, but what if I told you it was far more complicated than that?
There are several P/Es that you need to keep in mind. Sure, there is the current P/E, which reflects a stock’s price divided by the current year’s expected earnings per share, but there are also trailing P/Es, as well as price-to-peak-earnings and price-to-trough earnings. Obtaining more»
There are many things that we take for granted in this country. WiFi connectivity, water, streets and roads are some, as is milk. Yep, that whitish fluid that you put into your cereal, morning coffee, pancake mix and so on. What you may not realize is that milk prices, just like those for beef, pork, shrimp and others, have jumped significantly. Year over year, during the June quarter, raw milk costs increased 31% and rose 6% from the March quarter to an all-time high.
Dairy company Dean Foods (DF) shared that figure when it issued its most recent quarterly earnings results. more»
If you had never looked at a chart of any of the major stock market indices — the Dow Jones Industrial Average, the S&P 500 or even the Nasdaq Composite Index — before and you saw one from last week, you would likely say, “What happened?”
You and I know we saw a sell-off in the stock market that was started by talk of an Argentinean default and then continued with the sharp rise in the Employment Cost Index, which climbed 0.7% in Q2 2014, up from a 0.3% increase in the first quarter, and the initial more»
During the last few weeks, I’ve shared strategies to prepare your portfolio ahead of putting your dollars and savings to work. I’ve also shared an important technique to hone your investing skills — the postmortem breakdown of your investments, and how to recognize where you made smart decisions and where things may have deviated from what you hoped.
If you’ve been a longtime investor or even if you’re just a novice, you and I have many things in common, including wanting to generate profits. I mean, is anybody investing with the intention of losing money?
Like anything worth doing, let alone making more»
No doubt you’ve noticed that hundreds and hundreds of companies are reporting their quarterly earnings this week, with hundreds more to come next week.
These announcements tend to put Wall Street in a rapid-fire mode that results in a “shoot first, ask questions later” scenario.
Of course, it’s only later that you can put all of the pieces together and reconcile them with your larger investing mosaic.
As you sit back and sift through the data, you’ll also notice that even though the stock market is setting new highs, the S&P 500 is up only 7.5% year to date. Even if the stock more»
During the last few weeks, I’ve shared some important pre-trade and post-trade analytical steps that I do for each recommendation in my investment newsletter PowerTrend Profits and for positions in my Thematic Growth Portfolio. If you aren’t doing these, you need to go back and get started by re-reading these two bulletins.
Since those two articles were published, I’ve received more than a few questions about what should be done in between the pre-trade and post-trade analysis.
I thought that was a great question. But before I answer it, let’s consider the difference between a movie and a photograph.
Last week, I shared with you the importance of the postmortem trade analysis. I know it sounded a little strange to you, given that most people think a trade is over when you exit your position and book either a gain or a loss. However, that’s far from the case. Remember that investing is a process, and only by performing this autopsy-like analysis will you understand what went right and why. How can you hope to repeat good behavior and avoid past mistakes if you don’t recognize them?
That’s why this week I want to share with you another part more»