My resuls for the earnings season so far

Hi Saul,
Looks like another great quarter!!

I am just wondering why you would limit a companies growth at 200%. I think of it like having a really fast horse in a race. Since it is always finishing 5 lengths in front of all the other horses, I decide to add 20 pounds to it’s saddle to make sure the race is more fair. Wouldn’t it better to just put down the real growth and read the cc and financials to see how it really is doing?

Andy

I am just wondering why you would limit a companies growth at 200%. …Wouldn’t it better to just put down the real growth and read the cc and financials to see how it really is doing?

Hi Andy, Think of it this way. Say a company was just breaking into the black a year ago and made 1 cent. Then they made 2 cents, 4 cents, 6 cents, and this quarter they made 8 cents. Is that worth 800% increase? It would be silly and throw off all the averages of percent gains, etc. And a year from now they’ll probably be at about 20 cents, up 150% over 8 cents. The percent is so high because the denominator is so small. It just wouldn’t be realistic to call it 800% or 2000% or whatever, if the denominator is really small. 200% is where I usually cap the ridiculous numbers.

Saul

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Thanks Saul, I see your point.

Andy

Saul,

Would you mine sharing what you calculated for ABMD’s recent EPS? Since I updated the other values in the spreadsheet based on your calculations I would like to keep the methodology consistent.

Thank you!
–Kevin

Saul, Would you mine sharing what you calculated for ABMD’s recent EPS? Since I updated the other values in the spreadsheet based on your calculations I would like to keep the methodology consistent. Thank you!
–Kevin

Hi Kevin,
I found the quarterly stock-based compensation in the SEC filing, took 60% of that (allowing for 40% taxes), added that to the Net Income, and divided by the number of shares, and got 26.5 cents.
Saul

My results for the earnings season so far.

SEDG (SolarEdge) is the last of my companies to report this quarter with the exception of AMBA, which is on a different fiscal year and doesn’t report until September. I divided SEDG’s past quarters’ adjusted net income by the current number of shares to be more conservative, as they had their IPO this year and thus have considerably more shares now. Thus I get 66 cents for the full year instead of the 77 cents that they got taking the average number of shares for the fiscal year (which ends in June). They have a very clear earnings release, by the way.

For the quarter they made 31 cents, up from a loss of 6 cents and I wasn’t sure how to record that below. Even if it had been a gain of 6 cents the year before, instead of a loss of 6 cents, it would be up 400%, so I capped it at 200%.

INFN ---- 18/11 = 63.6%
SWKS —134/83 = 61.4%
INBK ----50/22 =127.3%
SNCR — 56/41 = 36.6%
SXK -----155/68 = 127.9%
BOFI ---- 154/109 = 41.3%
CRTO — 15/09 = 66.7%
EPAM — 64/53 = 20.8%
ABMD — 26/06 = 333% (but I’ll max it out at 200%)
ANET — 54/35 = 54%
SWIR — 26/08 = 225% (but I’ll max it out at 200%)
SEDG —31/(06) = 200% (maxed at 200%)

Average gain in earnings so far (year-over-year) = 99.9%. If you are comparing, the Mar quarter results for my entire portfolio were an average earnings gain of 69.8%. This has been a very good earnings season!

And here’s the 1YPEG information, with results at the time of reporting. Please note that these are from the time of reporting of each company’s earnings, and that I don’t update them.

INFN ---- PE was 36.7, TTM earnings growth is 142%, so 1YPEG was 0.26
SWKS ---- PE was 21.2, TTM earnings growth is 76.4%, so 1YPEG was 0.28
INBK ---- PE was 17.8, TTM earnings growth is 123%, so 1YPEG was 0.14
SNCR ---- PE was 21.7, TTM earnings growth is 31.6%, so 1YPEG was 0.68
SKX ----- PE was 29.5, TTM earnings growth is 107%, so 1YPEG was 0.28
BOFI ----- PE was 21.2, TTM earnings growth is 41.3%, so 1YPEG was 0.51
CRTO ----- PE was 44.2, TTM earnings growth is 105%, so 1YPEG was 0.42
EPAM ----- PE was 29.55, TTM earnings growth is 29.3%, so 1YPEG was 1.01
ABMD ----- PE was 60.9, TTM earnings growth is 149%, so 1YPEG was 0.41
ANET ----- PE was 41.4, TTM earnings growth is 77.5%, so 1YPEG was 0.53
SWIR ----- PE was 24.2, TTM earnings growth is 225.8%, so 1YPEG was 0.10
SEDG ----- PE was 45.9, TTM earnings growth is 200%, so 1YPEG was 0.22

Average PE so far is 32.9
Average twelve-month trailing earning’s growth rate is 109.1%

That would give a 1YPEG for the portfolio of 32.9 divided by 109.1, which equals 0.30.

For comparison, for the March quarter
Average PE was 28.0.
Average TTM earnings growth was 67.8%.
1YPEG for the portfolio was 0.42

We’re almost finished for the earnings season. Just AMBA remains.

Our average twelve-month trailing earnings growth of 109.1% seems quite extraordinary to me!

Saul

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Our average twelve-month trailing earnings growth of 109.1% seems quite extraordinary to me!
Out of interest Saul - how does this rank as a typical quarter/year for you from a portfolio growth/value rating perspective and what would be your average expectation?
Thanks
Ant

Our average twelve-month trailing earnings growth of 109.1% seems quite extraordinary to me!
Out of interest Saul - how does this rank as a typical quarter/year for you from a portfolio growth/value rating perspective and what would be your average expectation? Thanks Ant

Hi Ant, I don’t know because I never kept average twelve-month trailing earnings growth figures until I started doing it for this board. I think I started with the December quarter, but it might have been the September quarter. So it’s only three samples, or maybe four. At any rate, having an average twelve-month trailing earnings growth of 109% for all the stocks in a portfolio seems beyond extraordinary to me. After all, these weren’t single readings but results for the entire last twelve months!

Best,

Saul

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Sure Saul, I don’t disagree - remarkable. Just trying to gauge this situation relative to your 30 year track record. It begs an interesting question - how you used to select stocks and monitor performance before if you only recently started using this metric.
Ant

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