Hi Saul, You recently convinced me to start using these so I’ve started looking for them. Some companies such as AMBA make this really easy, but some others really don’t.
You got me interested in ABMD last week and started my digging, but there was seldom any mention of NON GAAP. Some of my other holdings were a bit hard as well.
It sounds like you are able to do this even if they aren’t obvious. Since some companies do NON GAAP differently, I was wondering if you could tell me how you do it (when not spelled out in press releases or 10Q forms).
Hi Brian, there’s a whole section on Adjusted earnings in the Knowledgebase, but briefly, I always remove stock-based compensation, repricing of warrants (if any), gains or losses from sales of buildings and such (which are by definition one-time deals), and big legal expenses due to acquisitions, etc.
Some companies like WAB don’t have any stock based compensation or warrants, and I usually just accept GAAP.
As I wrote about ABMD, it was hard to find their stock based compensation in the press release some quarters and it was clearly listed in others. When it was hard to find, I just looked in the 10Q, but it was a pain, and hard to tell if I had got it exactly right, but I figured I was close enough.