Intelligent Investor Ch.12 - Per-Share Earnings
Things to Consider About Per-Share Earnings Directly at the start of the eleventh chapter two very important lessons are made: Don't take a single year's earning seriously If you do, pay attention to short-term earnings, look out for booby traps in the per-share earnings If you follow the first advice, normally the second advice is not needed - even though Wall Street pays great attention to the current earnings - and that is your chance! To be sure and avoid any surprises, the annual earnings figures of a company, need to be examined thoroughly, and you should find a lot of clues in the footnotes of a 10-k! It can be everything from special charges, future tax savings, future reserves, or dilution of shares which will affect the per-share earnings. You need to adjust for these reservations and find the true earnings - or you find the average earnings. Use of Average Earnings Analysts and Investors paid before more time to the average earnings of ...