Hi MoneyAM,

how are the PE's worked out historical or propesctive?? A good example might be CCH international (cch). MoneyAM records it has a 2.77. This seems very low considering the latest results.
Cheers.

Try this site http://www.investopedia.com/terms/p/price-earningsratio.asp


The only problem is that different information sites seem to have different methods of making their projections and also deriving their P/Es.

Any way it is only guesswork I suppose!

Have a look at Jim Slaters work on P/Es and PEGS, it seems sensible.
The Zulu Principle etc.







A valuation ratio of a company's current share price compared to its per-share earnings.Calculated as: For example, if a company is currently trading at $43 a share and earnings over the last 12 months were $1.95 per share, the P/E ratio for the stock would be 22.05 ($43/$1.95). EPS is usually from the last four quarters (trailing P/E), but sometimes it can be taken from the estimates of earnings expected in the next four quarters (projected or forward P/E). A third variation uses the sum of the last two actual quarters and the estimates of the next two quarters. Also sometimes known as "price multiple" or "earnings multiple".

Thanks for that Fred. I would like to know how moneyAM works out the PE's.
Any offers.

kivver,

This information is sent directly from our supplier, and we do not make any of the PE calculations - they are provided by Thomson financial. Therefore, I cannot tell you the exact formula they use I am afraid.

Ian

thanks Ian.

Will the data come from Reuters once they merge with Thomson?

ValueMax,

I do not have any information on that.

Ian

My understanding is that the provision of data to Reuters customers will continue to be provided by the Reuters system and that Thomson's customers will be migrated over. I'd expect it to be pretty seamless. So the financial services businesses merge and Reuters Media is treated as a seperate organisation.

Most PEs supplied by financial providers are based on the last FY earnings aren't they?

Plus guess work. Have a look at IC's PE.

Projections = guess work, just like the charts.

I think the best thing to be done for P/Es is to work you own out form EPS and S/P and see if the return on you investment stands up against Bank rate etc. At least you have a comparison and whether it is acceptable. IE. P/E is 10 % and would take ten years at that rate to get your money back and original stake.

P/E 30 takes thirty years etc.. 3% P.A

I am a simpleton and use this when trying to may sense of present and prospective earnings.



Not being an accountant or too bloody lazy I have to rely on analysed fundamentals, but find there is often discrepancies between between analysts and one has to balance acceptance of this against hours of work.

Check this logic I am often stupid.

and of course moneyAM would want make sure the information they provide is correct (albeit provided to them from someone else). As part as my subscribtion I would want the info provided by MA to be as correct as possible. Many excellent parts to this service.