OKE and BBL

[notexactly]

(08-10-2015, 01:01 PM)notexactly Wrote:

(08-10-2015, 07:09 AM)rayray Wrote:

(08-09-2015, 11:39 PM)notexactly Wrote:

(07-08-2015, 08:43 PM)Dividend Watcher Wrote: Nice entry point, SIL.

BBL has a bit high of a P/E, revenues are going down, thoughts?

At a quick glance (so it may be different) I have BBL at

Stock: 36.76
Annual div: 2.48
EPS: 3.74
PE: 9.82
Payout Ratio: 66.310

Weird, why is FAST graphs/my stock applications saying this then?

[rayray]

I don't use fastgraphs and the only thing that pops out in my mind is that we're looking at two different P/E's; in other words, Forward PE and Trailing PE. Two different ways of getting and looking at PE's; Trailing PE is calculated by current share price divided by EPS over the last 4 quarters (last 12 months) and Forward PE is calculated by share price divided by estimated/expected EPS over the next 4 quarters (next 12 months).

So,

Trailing PE is looking at past performance, what has been accomplished.

Forward PE is looking at future performance, what might be accomplished.

BBL

Trailing P/E 9.61

Forward P/E 27.95


Oh, and I should add that Forward PE's will vary: Is the company and or analysts overestimating or underestimating future performance? Some companies have been known to be a little conservative with their estimates and may be viewed as playing games in order to "BEAT" other estimates. High/Low/Average estimates, what are investors paying right here right now per share? What could investors be paying in the future?

Looking at the above BBL's PE valuations people are paying approximately 9.61 times EPS (9.61*3.71=35.94 per share)

Using the Forward PE let's assume with the downturn in BBL's sector that their EPS estimate is 1.50/High 2.00/Low .80, so we take 27.95*1.50 or 2.00 or .80=41.93 per share/55.9 per share/22.36 per share.

Now let's assume BBL's actual EPS next year is 1.48 and the shares are trading at 39.50 that will give us a current PE of 26.69 (current share price/actual EPS=current PE). Now, if my entry point is 20 times earnings or less then this 39.50 share price would be too rich for my blood. I would need an entry point of 29.65 or less for a solid entry point, assuming actual EPS is 1.48.


Having said all this, maybe the current EPS has dropped and the current PE is 25 plus. I don't know? I'd have to see the current financials.

[Owner]

Fastgraphs uses a "formula" for figuring the P/E, that's the small rectangular window on the right side of the graph that specifies: "GDF...P/E=G 15.0" GDF stands for Graham/Dodd Formula, if I remember correctly. With some research of fastgraphs, you can find the article where they explain how they calculate P/E. There are two different formulas they use I think, depending on the companies growth rates.

Edit: Found it: http://www.fastgraphs.com/pdf/EarningsCalculations.pdf