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TheChimney
Jan 31, 2005

Limit Up posted:


Basic fundamental question:

P/E....how many people here use that as a gauge? Everyone says it does work/doesn't work and no one knows why some companies have high p/e's and why some don't.

It's junk unless you know how to use it.

Has anyone figured it out? What P/E is based on. I have a DEFINITE answer for this and I'd love to hear from the fundamental guys on this. Not calling you out, but just want you to know that if you're going to do fundamentals, you're going to have to have GOOD rules for this as well. Not cookie-cutter ratios.

I like fundamentals and can go all day on that as well

P/E is price over earnings per share. It can be shown as either trailing twelve months(ttm) or as a forward ratio. P/E ttm refers to price over EPS accumulated over the previous twelve months. Forward P/E refers to price over next year's anticipated earnings per share.

Generally speaking, the higher the P/E, the more optimistic investors are about a company's future earnings.

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TheChimney
Jan 31, 2005

Jack posted:

Most market participants use FCF before any of that EPS stuff too. See CRM & VMW for obvious examples.

From what I understand, you shouldn't be to quick to dismiss relative valuation methods(comparing P/E, PEG, EV/EBITDA, and other ratios to competitors and industry averages to find relatively undervalued stocks) in favor of discounted cash flows. Tiny miscalculations in the discount rate or other inputs to a DCF model can have huge impacts on your valuation. Because of this, there are still quite a few managers and analysts who favor using multiples to value stocks.

TheChimney fucked around with this message at 21:01 on Feb 9, 2010

TheChimney
Jan 31, 2005
double post

TheChimney
Jan 31, 2005

Hobologist posted:

FCF, not DCF. FCF is said to be more useful than earnings; it is earnings plus depreciation and amortization minus capital expenditures, and relieves certain businesses of excessive depreciation charges. Qwest, for example, looks more attractive when you put back about $800 million in excessive depreciation every year.

And I take the position that a multiple of earnings power is an absolute measure.

Sorry, whenever I have spoken about FCF with other it has been about forecasting FCF in the future and discounting them to present value. I agree with you that FCF are more useful than Earnings. As one of my professors says, "earnings is just an opinion, cash is a fact."

TheChimney
Jan 31, 2005

Hobologist posted:

and the majority of their total investment holdings falls due between 2010 and 2013, a period future economists may be calling the Great Municipal Bankruptcy Wave.

Do you have a source on this? I would be interested in reading more about it.

TheChimney
Jan 31, 2005
Is there a good resource for getting company financials in a clean looking excel format? Say if I want to look at the financials of Alcoa for the last four quarters and run my own analysis on them... Right now I'm going into EDGAR and manually downloading and formatting, but that is way too time-consuming.

In a similar vein, what is the best service for getting financial ratios? I've used yahoo and reuters before, but I've hear that they can be inaccurate.

If there is a broker that offers these, I would consider opening an account.

TheChimney
Jan 31, 2005

TheChimney posted:

Is there a good resource for getting company financials in a clean looking excel format? Say if I want to look at the financials of Alcoa for the last four quarters and run my own analysis on them... Right now I'm going into EDGAR and manually downloading and formatting, but that is way too time-consuming.

In a similar vein, what is the best service for getting financial ratios? I've used yahoo and reuters before, but I've hear that they can be inaccurate.

If there is a broker that offers these, I would consider opening an account.

Well, the best I've been able to do is go to EDGAR and open up the 10K/Q as interactive data and export that to excel. It's still a pain to do, but at least its faster than my old copy and paste method.

New question, does anyone feel like sharing their favorite stock market/finance blogs. I do mostly fundamental analysis, but I am willing to read just about anything ... as long as it's well written.

TheChimney
Jan 31, 2005

Turkeybone posted:

Yesssssss, suck it, OPEN.

But yeah OPEN really got the wind knocked out of it, I was getting a little nervous for a bit. Maybe there's been talk of a purchase, but I'm not really sure who would want to do it.. Google and FB have already made their "restaurant" plays on the whole, and while many restaurants use OPEN, they hate the % that they take; I'm sure a cheaper reservation system could swoop in if conditions were right.


Also V is looking pretty good today, I was trying to price some covered calls and said gently caress it, and just bought to open.

What kind of position did you have on OPEN?

TheChimney
Jan 31, 2005

Kneel Before Zog posted:

I'm also curious in how much importance I should be putting In looking at a stocks resistance/support levels. Is this solely a technical analysis train of thought or is it used by many investors?

That's something you are going to have to decide for yourself. A lot of trader's use technicals, and many claim that they use them profitably. However, In my experience I haven't seen much proof that it works.

My advice (which is next to worthless since I'm just some dude on the internet) is to do some reading on technical indicators and try to understand their applications and the reasoning behind them. Then, you can decide for yourself whether or not support and resistance is worth looking into.

TheChimney
Jan 31, 2005
Do you guys have investment philosophies?

Personally, I see myself as a student of Warren Buffet, and I focus only on the fundamentals. I try to act as if the stock market wasn't even there (I have to admit that this is much easier said than done).

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TheChimney
Jan 31, 2005
Their stock screener is okay. Does anyone know of a better one that is free?

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