My results for the earnings season so far

Investment Analysis Clubs Saul’s Investing Discussions
1

CELG just reported. Now I have seven earnings for this quarter. Here they are with the year-over-year percent gain in earnings for the quarter.
WAB ---- 99/83 = 19.3%
FB ------- 42/35 = 20.0%
SKX ---- 110/61 = 80.3%
INBK — 46/13 = 253.8%
SYNA — 165/63 = 161.9%
SNCR ---- 49/39 = 25.6%
CELG ---- 107/83 = 28.9%

The average year-over-year gain in earnings so far this quarter has been 84.3%.

And here’s the 1YPEG information, with the results as of the time of reporting.
WAB ---- PE was 25.3, TTM earnings growth is 20.0%, so 1YPEG was 1.26
FB ------- PE was 47.0, TTM earnings growth is 62.1%, so 1YPEG was 0.76
SKX ---- PE was 21.5, TTM earnings growth is 131.6%, so 1YPEG was 0.16
INBK — PE was 14.6, TTM earnings growth is 48.8%, so 1YPEG was 0.30
SYNA ---- PE was 15.9, TTM earnings growth is 33.9%, so 1YPEG was 0.47
SNCR ---- PE was 26.0, TTM earnings growth is 30.3%, so 1YPEG was 0.86
CELG ---- PE was 28.7, TTM earnings growth is 26.2%, so 1YPEG was 1.10

Average PE so far is 25.6
Average TTM earnings growth is 50.4%
Average 1YPEG so far is 0.70

Think about it. That’s stocks with an average PE of about 25 having an average year over year gain in earnings for the quarter of over 84% so far! And average trailing twelve month earnings growth of over 50%. You don’t need stocks with ridiculous PE’s, or stocks with no earnings (“But just wait five years!”) to get good earnings growth.

Saul

For comparison, the December quarter results were: Average gain in earnings (year-over-year, and not including XPO) = 69.85%.

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2

BOFI just reported. Now I have eight earnings for this quarter. Here they are with the year-over-year percent gain in earnings for the quarter.
WAB ---- 99/83 = 19.3%
FB ------- 42/35 = 20.0%
SKX ---- 110/61 = 80.3%
INBK — 46/13 = 253.8%
SYNA — 165/63 = 161.9%
SNCR ---- 49/39 = 25.6%
CELG ---- 107/83 = 28.9%
BOFI ---- 135/100 = 35.0%

The average year-over-year gain in earnings so far this quarter has been 78.1%. ---- For comparison, the December quarter results were 69.85%.

And here’s the 1YPEG information, with the results as of the time of reporting.
WAB ---- PE was 25.3, TTM earnings growth is 20.0%, so 1YPEG was 1.26
FB ------- PE was 47.0, TTM earnings growth is 62.1%, so 1YPEG was 0.76
SKX ---- PE was 21.5, TTM earnings growth is 131.6%, so 1YPEG was 0.16
INBK — PE was 14.6, TTM earnings growth is 48.8%, so 1YPEG was 0.30
SYNA ---- PE was 15.9, TTM earnings growth is 33.9%, so 1YPEG was 0.47
SNCR ---- PE was 26.0, TTM earnings growth is 30.3%, so 1YPEG was 0.86
CELG ---- PE was 28.7, TTM earnings growth is 26.2%, so 1YPEG was 1.10
BOFI ---- PE was 19.0, TTM earnings growth is 38.6%, so 1YPEG was 0.49

Average PE so far was 24.8
Average TTM earnings growth is 48.9%
Average 1YPEG so far was 0.67

Saul

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3

SWKS and POL just reported. Now 10 of my 15 stocks have reported earnings for this quarter. Here they are with the year-over-year percent gain in earnings for the quarter.
WAB ---- 99/83 = 19.3%
FB ------- 42/35 = 20.0%
SKX ---- 110/61 = 80.3%
INBK — 46/13 = 253.8%
SYNA — 165/63 = 161.9%
SNCR ---- 49/39 = 25.6%
CELG ---- 107/83 = 28.9%
BOFI ---- 135/100 = 35.0%
SWKS —115/62 = 85.5%
POL ------ 46/44 = 4.5 %

The average year-over-year gain in earnings so far this quarter has been 71.5%. The largest two positions (SWKS and SKS), making up almost 30% of my total portfolio, grew their earnings by 85.5% and 80.3%. ---- And, if you are comparing, the December quarter results for my entire portfolio were an average gain of 69.85%.

And here’s the 1YPEG information, with the results as of the time of reporting.
WAB ---- PE was 25.3, TTM earnings growth is 20.0%, so 1YPEG was 1.26
FB ------- PE was 47.0, TTM earnings growth is 62.1%, so 1YPEG was 0.76
SKX — PE was 21.5, TTM earnings growth is 131.6%, so 1YPEG was 0.16
INBK — PE was 14.6, TTM earnings growth is 48.8%, so 1YPEG was 0.30
SYNA — PE was 15.9, TTM earnings growth is 33.9%, so 1YPEG was 0.47
SNCR — PE was 26.0, TTM earnings growth is 30.3%, so 1YPEG was 0.86
CELG — PE was 28.7, TTM earnings growth is 26.2%, so 1YPEG was 1.10
BOFI ---- PE was 19.0, TTM earnings growth is 38.6%, so 1YPEG was 0.49
SWKS – PE was 21.2, TTM earnings growth is 76.5%, so 1YPEG was 0.28
POL ---- PE was 21.5, TTM earnings growth is 27.3%, so 1YPEG was 0.79

Average PE so far was 24.1. Note that Facebook was the ONLY one with a PE over 30! Also note that the HIGHEST PE of my three largest positions (SWKS, SKX, BOFI), making up over 43% of my portfolio, was 21.5. This is NOT an inherently risky portfolio!!!

Average TTM earnings growth is 49.5%. Again, the largest positions in my portfolio (SWKS and SKX), in spite of their low PE’s of 21.2 and 21.5, had the highest trailing growth rates of 76.5% and 131.6% (and consequently the lowest 1YPEG’s)

As far as 1YPEG, 3 of the 10 stocks have 1YPEG’s of 0.30 or less !! Two more are under 0.50. Three are between 0.50 and 1.00, and only two slower growing stocks are a little over 1.00. This is really a remarkable series of results.

Saul

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4

Hi Saul,

Why is the TTM earnings growth rate you use for the 1YPEG calculation different than the earnings growth at the top? What’s the difference?

Chad

5

Why is the TTM earnings growth rate you use for the 1YPEG calculation different than the earnings growth at the top? What’s the difference. Chad

Hi Chad, that’s an easy one. The earnings growth at the top refers to this quarter, as each company reports its quarter I calculate how much its results for the quarter are up from the same quarter the year before.

What I use for the 1YPEG is the trailing earnings for the year (the same earnings you use to calculate PE), and how much those trailing earnings are up from where they were a year ago.

In other words, one is the growth for the most recent quarter, the other is the growth for the most recent year.

Saul

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6

In case no one has thanked you today, thank you very much for this board! I’ve learned a lot so far from you and the other regular contributors. hopefully I’ll get to the point that I can add something of value.

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7

XPO just reported. Now 11 of my 15 stocks have reported earnings for this quarter. XPO is hard to include. Their results yoy were:

Gross Revenue --$703 million, up from $282 million
Net Revenue ----$262 million, up from $58 million
Adj EBITDA — $29.2 million, up from $0.7 million
Adj Earnings ----loss of 13 cents, up from a loss of 40 cents per share

Thus they were up at least 150% any way I think of, but they are still not profitable, so I won’t include them in my calculations.

Here they are with the year-over-year percent gain in earnings for the quarter.
WAB ---- 99/83 = 19.3%
FB ------- 42/35 = 20.0%
SKX ---- 110/61 = 80.3%
INBK — 46/13 = 253.8%
SYNA — 165/63 = 161.9%
SNCR ---- 49/39 = 25.6%
CELG ---- 107/83 = 28.9%
BOFI ---- 135/100 = 35.0%
SWKS —115/62 = 85.5%
POL ------ 46/44 = 4.5 %
XPO ------(13)/(40) = >150%???

The average year-over-year gain in earnings so far this quarter has been 71.5%. The largest two positions (SWKS and SKS), making up almost 30% of my total portfolio, grew their earnings by 85.5% and 80.3%. ---- And, if you are comparing, the December quarter results for my entire portfolio were an average gain of 69.85%.

And here’s the 1YPEG information, with the results as of the time of reporting.
WAB ---- PE was 25.3, TTM earnings growth is 20.0%, so 1YPEG was 1.26
FB ------- PE was 47.0, TTM earnings growth is 62.1%, so 1YPEG was 0.76
SKX — PE was 21.5, TTM earnings growth is 131.6%, so 1YPEG was 0.16
INBK — PE was 14.6, TTM earnings growth is 48.8%, so 1YPEG was 0.30
SYNA — PE was 15.9, TTM earnings growth is 33.9%, so 1YPEG was 0.47
SNCR — PE was 26.0, TTM earnings growth is 30.3%, so 1YPEG was 0.86
CELG — PE was 28.7, TTM earnings growth is 26.2%, so 1YPEG was 1.10
BOFI ---- PE was 19.0, TTM earnings growth is 38.6%, so 1YPEG was 0.49
SWKS – PE was 21.2, TTM earnings growth is 76.5%, so 1YPEG was 0.28
POL ---- PE was 21.5, TTM earnings growth is 27.3%, so 1YPEG was 0.79

Average PE so far was 24.1. Note that Facebook was the ONLY one with a PE over 30! Also note that the HIGHEST PE of my three largest positions (SWKS, SKX, BOFI), making up over 43% of my portfolio, was 21.5. This is NOT an inherently risky portfolio!!!

Average TTM earnings growth is 49.5%. Again, the largest positions in my portfolio (SWKS and SKX), in spite of their low PE’s of 21.2 and 21.5, had the highest trailing growth rates of 76.5% and 131.6% (and consequently the lowest 1YPEG’s)

As far as 1YPEG, 3 of the 11 stocks have 1YPEG’s of 0.30 or less !! Two more are under 0.50. Three are between 0.50 and 1.00, and only two slower growing stocks are a little over 1.00. XPO has negative earnings.

Saul

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8

CRTO just reported. Now 12 of my 15 stocks have reported earnings for this quarter. ,

Here they are with the year-over-year percent gain in earnings for the quarter. ,
WAB ---- 99/83 = 19.3%
FB ------- 42/35 = 20.0%
SKX ---- 110/61 = 80.3%
INBK — 46/13 = 253.8%
SYNA — 165/63 = 161.9%
SNCR ---- 49/39 = 25.6%
CELG ---- 107/83 = 28.9%
BOFI ---- 135/100 = 35.0%
SWKS —115/62 = 85.5%
POL ------ 46/44 = 4.5 %
XPO ------(13)/(40) = >150%???
CRTO ----28/12 = 133%

The average year-over-year gain in earnings so far this quarter has been 77.1%., (XPO isn’t counted for reasons I explained in the previous post in this thread). The largest two positions (SWKS and SKS), making up almost 30% of my total portfolio, grew their earnings by 85.5% and 80.3%. ---- And, if you are comparing, the December quarter results, for my entire portfolio, were an average gain of 69.85%.

And here’s the 1YPEG information, with the results as of the time of reporting,.
WAB ---- PE was 25.3, TTM earnings growth is 20.0%, so 1YPEG was 1.26
FB ------- PE was 47.0, TTM earnings growth is 62.1%, so 1YPEG was 0.76
SKX — PE was 21.5, TTM earnings growth is 131.6%, so 1YPEG was 0.16
INBK — PE was 14.6, TTM earnings growth is 48.8%, so 1YPEG was 0.30
SYNA — PE was 15.9, TTM earnings growth is 33.9%, so 1YPEG was 0.47
SNCR — PE was 26.0, TTM earnings growth is 30.3%, so 1YPEG was 0.86
CELG — PE was 28.7, TTM earnings growth is 26.2%, so 1YPEG was 1.10
BOFI ---- PE was 19.0, TTM earnings growth is 38.6%, so 1YPEG was 0.49
SWKS – PE was 21.2, TTM earnings growth is 76.5%, so 1YPEG was 0.28
POL ----- PE was 21.5, TTM earnings growth is 27.3%, so 1YPEG was 0.79
CRTO — PE was 38.2, TTM earnings growth is 320%, so 1YPEG was 0.11 (the lowest of any).

Average PE so far was 25.4,. Note that Facebook and Criteo were the ONLY ones with a PE over 30! Also note that the HIGHEST PE of my three largest positions (SWKS, SKX, BOFI), making up over 43% of my portfolio, was 21.5. This is NOT an inherently risky portfolio!!!

Average TTM earnings growth is 57.1%,. Again, the largest positions in my portfolio (SWKS and SKX), in spite of their low PE’s of 21.2 and 21.5, had the highest trailing growth rates (besides CRTO) of 76.5% and 131.6% (and consequently among the lowest 1YPEG’s)

As far as 1YPEG, 4 of the 12 stocks had 1YPEG’s of 0.30 or less !! Two more were under 0.50. Three were between 0.50 and 1.00, and only two slower growing stocks were a little over 1.00. XPO had negative earnings.

I hope that people find this interesting as it’s a bit of work to compile.

Saul

For FAQ’s and Knowledgebase
please go to Post #7972

29 Likes
9

Extremely interesting. Thank you Saul.

Brian

10

Saul,

Your prodigious work on your stocks is incredibly appreciated by us all!!! You are like a fine wine…getting better as you gracefully age and generously share your decades of wisdom with us all.

I’ve had the good fortune to follow your thinking for almost 3 years. Your analysis and clarity of thought have never been better. And your writing style is simple and direct making it easy for all to understand your reasoning.

We have all profited immensely because of your strong leadership.

Many many thanks for your daily sacrifice for us all on this board!!!

Jim

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11

Saul,

thanks so much, very helpful and, I look forward to reading your posts.

andy

12

Hi Saul,

How do you calculate the adjusted earnings for CRTO?

Chad

13

Hi Saul, How do you calculate the adjusted earnings for CRTO? Chad

Hi Chad - Adjusted Net Income divided by Number of Shares (the normal way).
Saul

14

EPAM just reported. Now 13 of my 15 stocks have reported earnings for this quarter.

Here they are with the year-over-year percent gain in earnings for the quarter.
WAB ---- 99/83 = 19.3%
FB ------- 42/35 = 20.0%
SKX ---- 110/61 = 80.3%
INBK — 46/13 = 253.8%
SYNA — 165/63 = 161.9%
SNCR ---- 49/39 = 25.6%
CELG ---- 107/83 = 28.9%
BOFI ---- 135/100 = 35.0%
SWKS —115/62 = 85.5%
POL ------ 46/44 = 4.5 %
XPO ------(13)/(40) = >150%???
CRTO ---- 28/12 = 133%
EPAM — 61/47 = 29.8%

Someone asked me if I would post the last eight quarters adjusted earnings for each stock as it reports so he could check his figures. Here they are (nine quarters, actually), for EPAM:

2013: 35 40 43 48
2014: 47 53 60 62
2015: 61

The average year-over-year gain in earnings so far this quarter for my portfolio stocks has been 73.2%. (XPO isn’t counted for reasons I explained in the previous post in this thread). The largest two positions (SWKS and SKS), making up almost 30% of my total portfolio, grew their earnings by 85.5% and 80.3%. ---- And, if you are comparing, the December quarter results, for my entire portfolio, were an average gain of 69.85%.

And here’s the 1YPEG information, with the results as of the time of reporting.
WAB ---- PE was 25.3, TTM earnings growth is 20.0%, so 1YPEG was 1.26
FB ------- PE was 47.0, TTM earnings growth is 62.1%, so 1YPEG was 0.76
SKX — PE was 21.5, TTM earnings growth is 131.6%, so 1YPEG was 0.16
INBK — PE was 14.6, TTM earnings growth is 48.8%, so 1YPEG was 0.30
SYNA — PE was 15.9, TTM earnings growth is 33.9%, so 1YPEG was 0.47
SNCR — PE was 26.0, TTM earnings growth is 30.3%, so 1YPEG was 0.86
CELG — PE was 28.7, TTM earnings growth is 26.2%, so 1YPEG was 1.10
BOFI ---- PE was 19.0, TTM earnings growth is 38.6%, so 1YPEG was 0.49
SWKS – PE was 21.2, TTM earnings growth is 76.5%, so 1YPEG was 0.28
POL ----- PE was 21.5, TTM earnings growth is 27.3%, so 1YPEG was 0.79
CRTO — PE was 38.2, TTM earnings growth is 320%, so 1YPEG was 0.11 (the lowest of any).
EPAM — PE was 28.1, TTM earnings growth is 32.6%, so 1YPEG was 0.86.

Average PE so far was 25.6. Note that Facebook and Criteo were the ONLY ones with a PE over 30! (I’m now out of FB). Also note that the HIGHEST PE of my three largest positions (SWKS, SKX, BOFI), making up over 43% of my portfolio, was 21.5. This is NOT an inherently risky portfolio!!!

Average TTM earnings growth is 65.9% (I think I under calculated it last time). Again, the largest positions in my portfolio (SWKS and SKX), in spite of their low PE’s of 21.2 and 21.5, had the highest trailing growth rates (besides CRTO) of 76.5% and 131.6% (and consequently among the lowest 1YPEG’s)

As far as 1YPEG, 4 of the 12 stocks had 1YPEG’s of 0.30 or less !! Two more were under 0.50. Four were between 0.50 and 1.00, and only two slower growing stocks were a little over 1.00. XPO had negative earnings.

Again, this is almost the opposite of a MF RB portfolio, where everything is over priced (it’s actually one of the criteria they look for), with enormous PE’s, and 1YPEG’s way over 1.00 (or 2.00, or 3.00). Our average PE is 25.6, yet the quarterly increases in earnings averaged 69.8% last quarter and are at 73.2% so far this quarter. Think about that!!! And the average year-over-year earnings growth is 65.9%! Just saying…it can be done.

I’m glad that people have found this interesting, as it takes an effort to compile it as each company reports.

Saul

For FAQ’s and Knowledgebase
please go to Post #7972

23 Likes
15

Truly appreciate the effort Saul. What you’re doing is really turning things on its head and teaching a great way to invest. Just starting to incorporate some things and already seeing a difference. Thanks!!

Chad

1 Like
16

Interesting and incredibly helpful. Thanks!

Andy

17

Saul,

You have introduced a whole new investing paradigm for this board to ponder and profit from.

Who would have thought that you could have explosive growth coupled with extremely reasonable valuations? Low PEs coupled with extremely low 1YPEGs!!!

I for one appreciate the huge margin of security that is built into this paradigm. I’ve never seen such a reasonable logical method of investing. It completely takes the emotion out of jumping onto the next high flying stock just because of the momentum built into the next “can’t miss” story. WPRT comes to mind as a classic example.

This has caused me to sell out of a few of my beloved stocks such as UA simply because it logically makes no sense to keep investing/holding companies that are simply way over priced.

Thank you, Saul, for teaching me an investing analysis technique that has proven to be extremely profitable relative to the S&P index. You have given us all a powerful investing paradigm that will benefit us for the remainder of our investment days… and something we can pass on to our children and grandchildren.

Jim

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18

Thanks Jim, That’s very kind of you to say that.
Saul

19

Who would have thought that you could have explosive growth coupled with extremely reasonable valuations? Low PEs coupled with extremely low 1YPEGs!!!

I for one appreciate the huge margin of security that is built into this paradigm.

I appreciate that low PEs are somewhat safer that high PEs, tending to be less sensitive to price swings from perceived earnings misses or other bad news. But not sure I’d describe it as huge. For instance AIOCF had a PE of 22, so fairly low, missed on earnings, and got clobbered. Same with UBNT with an ever lower PE.

Overall I agree that this strategy is useful and a lot of my money is in it, but just want to caution that low PE is not foolproof insurance.

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20

For instance AIOCF had a PE of 22, so fairly low, missed on earnings, and got clobbered… just want to caution that low PE is not foolproof insurance

I don’t think anyone is advocating looking at P/E in isolation – it’s meaningless in isolation. What’s been talked about here is P/E relative to the company’s ongoing growth (in earnings, which is where AIOCF is falling short and probably the reason it got clobbered).

It’s just one metric, of course. It’s certainly not a substitute for understanding the business and formulating an independent opinion of where it might go from here. But for a company that looks to be executing well, and has a nice growth runaway ahead of it, it makes sense that buying great earnings growth at a lower price relative to current earnings would probably lead to reasonable results over the long term, all things being equal.

Obviously nothing is for certain, and we’ll each undoubtedly be wrong occasionally – that’s why we have a portfolio of companies instead of one or two. But I think it’s still a useful data point.

Neil

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