| Welcome Guest, please sign in to participate in a discussion. | Search | Active Topics | |
Registered User
Joined: 3/15/2005
Posts: 95
|
Craig,
I enjoyed meeting you at the Ft. Lauderdale Snapsheets training!
I would like to know if snapsheets could be used to graph envelope channels as follows:
1. Seach past P/E ratios for the past 5 years. Select both the maximum and minimum P/E s over the last 5 years.
2. Multiply the maximum P/E with the historical EPS figures. This will produce the upper channel on the historical graph.
3. Multiply the minimum P/E with the historical EPS figures. This will produce the lower channel.
If this can be done, is the Worden historical data feed required ( I assume it is)?
Thanks,
bradsticker
|
|
Worden Trainer
Joined: 10/1/2004
Posts: 18,819
|
I did this (yes it does require the Hemscott data feed).
The values returned don't fit nicely around price.
I did the MAX/MIN PE for 1 year times the EPS to get the channel values.
MMM is giving me a top channel around 43 and a bottom channel around 18. I think we need to multiply by the P/E by either something other than EPS or EPS+something else to get the values closer to the price of the stock.
In your example we are dividing price by the earnings then multiplying by the earnings per share. This won't lead to values near price.
- Craig
Here to Help!
|
|
Registered User
Joined: 3/15/2005
Posts: 95
|
Craig,
MMM hit $88 last May, I suspect that was the high P/E for the year. So by definition, the P/E times the earnings per share should come out to be $88. Since the EPS for the third qtr is $1.18 vss the $1.14 of the second qtr., the top band should currently be higher than $88.
I suspect that the problem is that the EPS (that is used to multiply the high and low P/E) needs to be the sum of the trailing four quarters. While we are at it, we should make sure that the P/E reported by Hemscott is calculated by using the trailing 4 qtr EPS. I know that some reporting services use the trailing 2 qtrs. and the next 2 qtr. projections.
bradsticker
|
|
Worden Trainer
Joined: 10/1/2004
Posts: 18,819
|
There is some other factor that is making them not match. Let me look into it and get back to you.
- Craig
Here to Help!
|
|
|
Guest-1 |