We appreciate all your hard work Chuck. It's rare to be able to listen to someone with as much experience and knowledge as you have, and I truly appreciate every video you put out. 👍
I feel the same way about Chuck. I have only been investing in stocks for 14 months and I have learned so much from Chuck. He is so full of knowledge. Thanks Chuck for sharing your knowledge with us and helping us.
Very timely, I just started realizing the importance of this and started reviewing my positions taking this into account. Wish I know about this stuff 30 years ago.
Cannot believe people have criticized you because some of their holdings are down, it's just plain stupid! 🤦♂️ I am long CMCSA, MMM and SWK, happily added to the first 2 positions as they got cheaper and am holding my SWK position. Thank you for bringing them to my attention over the past couple of months so that I could look further into them.
I love FAST/FUN Graphs and especially Professor Chuck's insightful presentations focused on value investing. I am retired and did a good job of saving for the future, and now I am quite conservative and focus on "margin of safety". At my age "preservation of capital" is far more important than "accumulation of capital." Would it be possible for you to include a discussion of Warren Buffett's "EQUITY BOND" concept into a future tutorial? I think his thesis is to the effect of: "Paying 10x EBT for a business that will stagnate forever is like owning a bond with a 10% yield." As always, thank you for your excellent tools and for your sharing your knowledge.
That's a useful, convenient way to consider growth estimates, to measure against risk. Everyone should also do that "compressing time calculation" for a series of uniform $investments aka, Dollar Cost Averaging, over a period of 36 years.
slow and steady wins the race, high quality dividend paying stocks purchased at intrinsic value is like running down down hill. just made that up hah! Thank you Mr. Valuation!!!!!
Is was building a position in 3M but sold out of it when it shot up 10% after the split message. SWK felt and looked like the next best thing and eventhough it fell a bit the last few weeks. I'm for now glad. I can build my position and add more shares at even better prices. I had Abbvie which for me doubled because someone said that it was too cheap to ignore. Not saying who 😀
@@dimzoll3669 Because I don't like investing in companies that shoot up that much. The PE was also getting higher than I like. SWK was dropping a bit and still under a 15 PE. So I took the short term gain and investedin SWK.
Yes. Great work Chuck. Fast to fall, slow to rise... and they are not done falling... yet. Edit: tons of GREAT points! And we totally hear you on cmcsa too! Your points and stances are not lost on deaf ears!
No complains from me. I love your videos. I bought Black and Decker before the earnings, the price has gone down since then. I’m thinking this is a better buying opportunity now and considering buying more. I’m sure this company can recover and I will reinvest the dividends. We will see how it turns out in the next 5 years. Keep up the good word.
Today was a very bad day from market. Lots of stocks drop 5% or more. However,the lawsuits over earplugs is a real concern. Nevertheless, I feel that 3M gets through it. but that is a risk investors need to decide for themselves. Regards, Chuck
Great video, thanks. All good investments start in discomfort. If you feel good about it because the marked is cheering, you will probably be dissapointed long term. If you feel discomfort - look deeper, check your thesis and trust your valuation and you will be rewarded long term.
I would also add WBA, the stock price is going so low despite the forecast of the company having a slight growth over the next 3 years. IMO it's a classic overexaggeration by investors.
@@Metal_Stacking you collect the dividends while you wait for the turnaround. Before it started dropping in 2015, it was at a long period of paying at a premium. I can afford to wait. 5 years is not long term, you can have 8-10 years of a company doing nothing and then just go on a tear. Microsoft comes to mind when you talk about a profitable company doing nothing for a decade. With Walgreen your paid to wait for the turnaround at least. Chucks actually talks about it when he talks about Comcast which can be applied for Walgreens.
I am invested in MO / GOOGL / SWK I consider my cost basis to be pretty decent on each and like this risk reward in the next 3-5 years. Appreciate your videos Chuck especially with investing principles. If you buy a stock and it goes down it doesn’t mean you were wrong, patience is important with dividend growth stocks
I think most ppl confuse with investing in time horizon while giving criticism, short term or long term, both is a way of investing. Learn things you think is good for you, not based on are others are right or wrong. In the end YOUR Bank account matter not OTHERS. Mr. Valuation has his way of thinking, and I think it is commendable he has been sharing his knowledge.
Thanks again for sharing your knowledge. two points to make. Glad to hear that you're not concerned about the people that get angry about your predictions not working out in the first hours,days or months.they don't understand your long term strategy. It's hard for me to conceive that someone would realistically would expect instant gratification. 2. The rule of 72 is a very good tool, but the math breaks down the higher the interest rate. Not at all intended to be a criticism just an observation. Keep up the good work
Jeffrey: I'm not sure what you mean by the math breaks down at high rates. However, I agree that the rule of 72 is a good general guide but not perfect . The true point is that higher growth rates compress time and therein lies the importance of the message - in my humble opinion. Regards, Chuck
Sorry Chuck What I meant by the math breaks down is it works almost perfectly at 8 9 10%, but when you get up to the upper numbers such as 20% or let's go extreme 36% it breaks down and it's not as accurate. So at the extreme I'm talking about 36% the rule of 72 would imply that you double your money in exactly 2 years. Where is that would turn out to be about 85% at the 2-year mark again not a criticism just an observation
@@jefferyhinson1135 no apology necessary, I agree that the rule of 72 is simply a guide slightly more accurate than a metaphor. But once again, it's a great way to illustrate how important the compression of time is. maybe stated more accurately it illustrates the power of compounding. Thanks, Chuck
I bought SO in 2018 for 47 a share. Sold it a couple weeks ago for 78. With reinvested dividends was getting close to a double, but thought it was a good time to bail and buy growth stocks.
Superb content, I always watch when you have a video come out because I always learn something every time I watch one. You should have been a teacher.. can you do ip? International paper? What are your thoughts on it also? I bought it a couple years ago when I first started investing it, it looks like a solid company? What do you think?
International Paper I believe is a solid company. However, it is a little too cyclical for my personal taste. consequently, I believe it's very important to be especially careful with valuation. With that said that valuation does look attractive at current levels. Regards, Chuck
Hi Chuck. You show that ALTRIA has a "blended PE" of 9.62 while others (Yahoo Finance, MarketWatch, etc) are showing PEs around 18 or so for this stock. Just what is "blended PE". This can make a big difference to someone looking to purchase this stock based on valuation. Thanks
1st, other sites are using diluted or GAAP earnings and measuring them TTM (trailing 12 months). here is a more comprehensive definition: "There are several factors that will cause financial websites to report different P/E ratios. For starters, you must be cognizant of the specific earnings metric that is being utilized. Many sites will utilize diluted (GAAP) earnings when they do the calculation. FAST Graphs defaults to “Adjusted (Operating) Earnings.” However, “Diluted Earnings (GAAP)” are available with FAST Graphs along with three (3) other metrics (“Normalized Basic Tax-Adjusted Earnings” “Normalized Basic Earnings” “Basic Earnings”). We also offer calculations based on Cash Flow or FFO and AFFO for REITs. The following is describing the FAST Graphs blended P/E ratio. This approach is utilized with all the metrics that FAST Graphs offers: Blended P/E: One of the simplest and most commonly used ways to determine the value of a publicly-traded business is by checking the company’s P/E ratio. The formula is very simple, it is simply the current price (P) divided by earnings (E). At first glance, this seems simple enough, but often it is not as simple as it appears. The company’s stock price is reported in real time on most financial websites that offer a quoting service. But businesses only report earnings on a quarterly basis. Consequently, when we are between the quarterly reports, we really don’t have a precise earnings figure upon which to calculate the P/E ratio. As a result, not all financial websites report the P/E ratio on the same basis. Some will report P/E ratios based on trailing twelve month earnings (ttm), others might report the P/E ratio based on forward earnings, and some will report P/E ratios on both. Unfortunately, this can lead to a common mistake that is often made when looking at a P/E ratio on a quoting service. The price or numerator (the top number) is current and accurate. However, it is the earnings or the denominator (the bottom number) that can be problematic. If you are using trailing earnings (ttm), your denominator might be too small, thereby causing the P/E ratio to be higher than it really is. If you are using forward earnings, they might not manifest as expected, thereby causing the denominator to be too large, which makes the P/E ratio calculation look lower than it truly is. Consequently, FAST Graphs calculates the current P/E ratio by taking a blended approach. Admittedly, like the trailing or forward calculations, a blended P/E ratio might not be perfectly accurate either. However, we do believe that a blended P/E ratio calculation will be more precise than the two other alternatives. Trailing twelve months’ earnings can be getting stale, especially when we are in the late innings of the next quarter. Earnings estimates out to the next year may be too optimistic. However, giving credit to the current quarter’s earnings estimates are more likely to be realistic or close to it. Here it is important to note that it takes companies approximately 45 days after the close of the fiscal quarter before the actual numbers are reported. Consequently, it is possible that a trailing twelve month number might be 4 ½ months old. Therefore, by blended P/E ratio, we mean a weighted average of the most recent actual reported earnings plus the closest quarterly forecast earnings. This gives the most weight to the past “actual” reported earnings, but also includes an appropriate consideration of the company’s continuing earnings power post their last report. For most companies, the blended P/E ratio calculation will be using a moderately higher denominator than trailing twelve months. In other words, we believe the blended P/E ratio calculation is based on a more current level of earnings.regards, Chuck
@@FASTgraphs Thank you for the excellent and timely response, Chuck. I'm currently going through the 7 day trial and am very much impressed with how making everything very visual is extremely helpful to assessing a stock.
Hey Chuck, loved your presentation as an intro, very well explained :) How do you factor in the debt levels of these companies into your evaluation? I personally consider DIS and SWK as companies that carry rather high levels of debt…Could you maybe go into FUN graphs and focus on debt? :)
Yes, you could go into FUN and/or the financial statements or even the health check. However, as a overgeneralized statement American companies have taken on more debt due to the low interest rates. In short they are earning much more on the capital then it cost them to obtain it. Cash flows are also an important consideration. Regards, Chuck
Hi Chuck, new subscriber here and love the vids/analysis. Would you possibly have a look at the company, Smith and Wesson (SWBI); they are a small cap arms manufacturer (controversial), low PE ~4, 3% dividend, and perform significant stock buybacks. Best wishes,
Hey chuck One more bit of information for you than concerns me. I have reason to believe that MMM is going to be involved in thousands maybe millions of lawsuits in the coming years .the latest is over firefighter equipment using a chemical PFAS. I just wonder if our money is better getting out of 3m altogether? Your thoughts please Thanks , jeff
litigatiion risks are real and already priced in in my opinion. Firms like MorningStar are recognizing these risks but consider them manageable and the long-term. When stocks like 3M become inexpensive there are always reasons. The question is whether they are long-term detrimental or surmountable. Remember, there is no substitute for comprehensive research and due diligence. Regards, Chuck
If you're in possession of inside information as you claim, you should be working 24/7 with a team of attorneys, not wasting your time posting TH-cam rumors.
@@FASTgraphs , Excellent video again. Am sorry that you left The Dividend Kings as you added great value to that service I've been subscribed to for about 3 years now and am considering subscribing to yours. Concerning 3M, readers need to do new research on it as the Texas 2 step spinoff affects litigation costs ala a certain (Pharma company) recently and recent scientific discovery on high temperature water treatment regarding PFAS. With that said, I disagreed with Adam at first and sold nearly half of MMM saying that I agreed with Nick about similar opportunities with less risk. Now with recent developments am holding the rest for more information before committing more capital, at more likely a better entry point. Building dry powder on the rips by rebalancing as I believe Mr Market has another leg lower when earning revisions come out in September. Respectfully, Retired Dal Amt 🇺🇲🙏😎
Buy the dip that keeps on dipping and go broke. Read charts before you buy. Period. Or wait several years to possibly recoup and miss market leaders. The opportunity cost is real and so are the risks. But if income focused I guess SLOW growers like most of these are OK. The only one in the video even worth considering really is CMCSA. Read a chart though.
You said in a previous video that Comcast might be a good company to own, but that I should do my own due diligence before investing. So I immediately put my entire life savings in the stock without looking at any earning figures. Hours after I bought it, the stock price declined 0.03%, so I quickly panic-sold and used the money to buy electronic photos of monkeys instead. Now those monkey jpegs are worthless and I’ve lost my entire life savings. This is all your fault.
The problem is the that the FED seems to decide if stock markets rallye or crash as you can even today. Fundamentals seem to get more and more unimportant. The other problem ist, that forecasts can be completely wrong or much to optimistic as you can see now. Massive recession incoming 😞 Many weak years of downturn are mentally budensome...
I must respectfully disagree from the long-term perspective. In the short run that may be true as I indicated in the video. However, only fundamentals are lasting. Emotions and artificial constructs like you mentioned tends to be short-lived. This is happened many times in the past and always gives out to fundamental value. Every known bubble as eventually burst as a result. Regards, Chuck
fundamental investing is not a method it's a process. In fact, it's the only strategy that lets you spot deteriorating fundamentals early enough. Finally, in the aggregate world class companies do not let you down, but there is an exception to every rule. Regards, Chuck
@@FASTgraphs Yes, I've done that and decided that it's very likely to go quite a bit lower along with the whole market as we enter a recession in the next 0-1.5 years
MMM dropped 10% today. Would take 2 years of dividends to regain that loss. More losses likely coming due to Fed rate hikes and likely recession. Doubling your investment will take longer in this environment.
@@bhbaker220 This environment is why I also own some bonds. Stocks will probably bounce back in one to three years and bonds help smooth things out in the meantime. I set my portfolio up with my desired asset allocation and then I don't worry about the crazy gyrations that Mr. Market goes through periodically.
We appreciate all your hard work Chuck. It's rare to be able to listen to someone with as much experience and knowledge as you have, and I truly appreciate every video you put out. 👍
+1
Couldn't agree more!
Yes, every video, every one!
I feel the same way about Chuck. I have only been investing in stocks for 14 months and I have learned so much from Chuck. He is so full of knowledge. Thanks Chuck for sharing your knowledge with us and helping us.
Very timely, I just started realizing the importance of this and started reviewing my positions taking this into account. Wish I know about this stuff 30 years ago.
Long MMM CMCSA and SWK. Great video!
good afternoon, I watch you from the other side of the earth all the time when you have a night, I have a day, so hello to you from Kazakhstan.
Cannot believe people have criticized you because some of their holdings are down, it's just plain stupid! 🤦♂️
I am long CMCSA, MMM and SWK, happily added to the first 2 positions as they got cheaper and am holding my SWK position. Thank you for bringing them to my attention over the past couple of months so that I could look further into them.
Great videos. Anyone giving harsh criticism shouldn’t be investing. At the end of the day it’s on you to make decisions and to be patient. Thanks
Thank you for this video Chuck! And thank you for stressing that no one knows how to pick the top or bottom (nor should that be our focus).
I love FAST/FUN Graphs and especially Professor Chuck's insightful presentations focused on value investing. I am retired and did a good job of saving for the future, and now I am quite conservative and focus on "margin of safety". At my age "preservation of capital" is far more important than "accumulation of capital."
Would it be possible for you to include a discussion of Warren Buffett's "EQUITY BOND" concept into a future tutorial? I think his thesis is to the effect of: "Paying 10x EBT for a business that will stagnate forever is like owning a bond with a 10% yield."
As always, thank you for your excellent tools and for your sharing your knowledge.
How can you be criticized, you are the coolest dog in TH-cam… Thank you Sir!!!
That's a useful, convenient way to consider growth estimates, to measure against risk. Everyone should also do that "compressing time calculation" for a series of uniform $investments aka, Dollar Cost Averaging, over a period of 36 years.
This is a fantastic video. Sharing with my friends, you made this easy to understand. Thank you Chuck
Thank you, Chuck, for all these Videos, and Greetings from Bavaria, Germany!
This is prime example for financial education. Please keep on doing so.
Another great lesson Chuck. Thank you for taking the time to do this.
You are the man Chuck! A legend! Anyone being negative toward you probably owns meme stocks lol
TY for all that you do Chuck. Disregard the naysayers. 99% of the time, they are clueless
Compounding is my Stratege since over 20 years, thx very clear
slow and steady wins the race, high quality dividend paying stocks purchased at intrinsic value is like running down down hill. just made that up hah!
Thank you Mr. Valuation!!!!!
Thanks, I may steel that line.
Great investing points to bring us back to reality. Thanks Chuck
Chuck, we appreciate your comments. Keep up the good work.
MMM got hammered Friday. I own it, but I am not sure of adding more since I think the earplug liability can run into $10s of Billions of $s.
Is was building a position in 3M but sold out of it when it shot up 10% after the split message. SWK felt and looked like the next best thing and eventhough it fell a bit the last few weeks. I'm for now glad. I can build my position and add more shares at even better prices.
I had Abbvie which for me doubled because someone said that it was too cheap to ignore. Not saying who 😀
Why did you sell 3M after the spinoff news? That is actually sth good
@@dimzoll3669
Because I don't like investing in companies that shoot up that much. The PE was also getting higher than I like. SWK was dropping a bit and still under a 15 PE. So I took the short term gain and investedin SWK.
Chuck we love you! Great video as usual!
Epic breakdown and investing expertise of the elite valuations of Mr. Valuation 👍🏼🙏🏽🙌🏼❤️🏆
Great video, i own SO and MO and it's nice because MO just upped their dividend 2 days ago again. Great stocks.
Yes. Great work Chuck. Fast to fall, slow to rise... and they are not done falling... yet. Edit: tons of GREAT points! And we totally hear you on cmcsa too! Your points and stances are not lost on deaf ears!
Great video! Thanks for the insights Chuck.
Patience is a bliss in investing. One of the few times, that the game plays to my advantages...
We appreciate your hard work!!!
Thanks. I always learn something when i watch your videos.
Thanks Chuck, informative as always
No complains from me. I love your videos. I bought Black and Decker before the earnings, the price has gone down since then. I’m thinking this is a better buying opportunity now and considering buying more. I’m sure this company can recover and I will reinvest the dividends. We will see how it turns out in the next 5 years. Keep up the good word.
+1
Am doing exactly the same.
Chuck looking sharp in the grey T-shirt and looking slim. You are so great explaining things - Power of Compounding
Thank you for every video you upload. I see that MMM dropped nearly 10% today. Can you make a comment or two about that company? Thanks.
Today was a very bad day from market. Lots of stocks drop 5% or more. However,the lawsuits over earplugs is a real concern. Nevertheless, I feel that 3M gets through it. but that is a risk investors need to decide for themselves. Regards, Chuck
I took another look at Comcast after the video and liked what I saw! MMM is getting into bargain territory too.
Very good video! Chuck the master.
Beautiful work. Please turn up the volume a hair. Just a little louder if possible guys. Best regards.
I think the term "Mr. Valuation" should be replaced with "Professor Valuation," instead.
Thank you, Professor!
Great video, thanks. All good investments start in discomfort. If you feel good about it because the marked is cheering, you will probably be dissapointed long term. If you feel discomfort - look deeper, check your thesis and trust your valuation and you will be rewarded long term.
Great job Chuck
Im liking SWK and CMCSA
OOOhhh, time to add SWK at last. Thank you.
Great content, as always. Thanks, Chuck.
I would also add WBA, the stock price is going so low despite the forecast of the company having a slight growth over the next 3 years. IMO it's a classic overexaggeration by investors.
Long WBA... hoping to double my position soon.
WBA has been falling for 5 years when will it turn around no one knows.
@@Metal_Stacking you collect the dividends while you wait for the turnaround. Before it started dropping in 2015, it was at a long period of paying at a premium. I can afford to wait. 5 years is not long term, you can have 8-10 years of a company doing nothing and then just go on a tear. Microsoft comes to mind when you talk about a profitable company doing nothing for a decade. With Walgreen your paid to wait for the turnaround at least.
Chucks actually talks about it when he talks about Comcast which can be applied for Walgreens.
@@filb I'm not against wba stock I'm actually steadily increasing position just passed 100 shares.
@@filb also have been buying comcast as well.
I am invested in MO / GOOGL / SWK I consider my cost basis to be pretty decent on each and like this risk reward in the next 3-5 years. Appreciate your videos Chuck especially with investing principles. If you buy a stock and it goes down it doesn’t mean you were wrong, patience is important with dividend growth stocks
Thanks for content chuck
Great Video wunderfull
I think most ppl confuse with investing in time horizon while giving criticism, short term or long term, both is a way of investing. Learn things you think is good for you, not based on are others are right or wrong. In the end YOUR Bank account matter not OTHERS. Mr. Valuation has his way of thinking, and I think it is commendable he has been sharing his knowledge.
Another great information thank you Chuck
thank you for you excellent video chuck, valuation matters
GL.
Thanks again for sharing your knowledge. two points to make.
Glad to hear that you're not concerned about the people that get angry about your predictions not working out in the first hours,days or months.they don't understand your long term strategy.
It's hard for me to conceive that someone would realistically would expect instant gratification.
2. The rule of 72 is a very good tool, but the math breaks down the higher the interest rate. Not at all intended to be a criticism just an observation.
Keep up the good work
Jeffrey: I'm not sure what you mean by the math breaks down at high rates. However, I agree that the rule of 72 is a good general guide but not perfect . The true point is that higher growth rates compress time and therein lies the importance of the message - in my humble opinion. Regards, Chuck
Sorry Chuck
Sorry Chuck
What I meant by the math breaks down is it works almost perfectly at 8 9 10%, but when you get up to the upper numbers such as 20% or let's go extreme 36% it breaks down and it's not as accurate. So at the extreme I'm talking about 36% the rule of 72 would imply that you double your money in exactly 2 years. Where is that would turn out to be about 85% at the 2-year mark again not a criticism just an observation
@@jefferyhinson1135 no apology necessary, I agree that the rule of 72 is simply a guide slightly more accurate than a metaphor. But once again, it's a great way to illustrate how important the compression of time is. maybe stated more accurately it illustrates the power of compounding. Thanks, Chuck
Yeah! Another stock shopping spree!
Thank you for your Hardwork and Quality Content! Much appreciated!
I love your analysis brother!
Hello Mr. Carnevale,
When possible, could you please provide an update on SWK? Thank you for sharing
I bought SO in 2018 for 47 a share. Sold it a couple weeks ago for 78. With reinvested dividends was getting close to a double, but thought it was a good time to bail and buy growth stocks.
We get it, you timed it perfectly
Thank you Mr. Evaluation
Fantastic Video Chuck
Superb content, I always watch when you have a video come out because I always learn something every time I watch one. You should have been a teacher.. can you do ip? International paper? What are your thoughts on it also? I bought it a couple years ago when I first started investing it, it looks like a solid company? What do you think?
International Paper I believe is a solid company. However, it is a little too cyclical for my personal taste. consequently, I believe it's very important to be especially careful with valuation. With that said that valuation does look attractive at current levels. Regards, Chuck
@@FASTgraphs thank you!
That's a great perspective. Thanks.
I am really grateful for your useful insights.
What is your oponion about Hanes? Good divi but high debt, i am kinda split
I am more concerned with the deteriorating fundamentals of HBI.
I had also looked at HBI and was initially put off by the lack of growth in the dividend.
This is something I plan to revisit if fundamentals improve.
You don't have to introduce yourself chuck. We all know who you are. Lol 🤣
MMM is threating to go Chapter 11 over lawsuit claims from defective military earplugs. Might want to avoid this until some clarity comes out of that.
Yea and the PFOA chemicals are a serious concern for the company. Not to mention a concern to everyone’s health.
Uncle Chuck, if you do another request video, $AL $SEE $FAST & $SLGN I would love to hear your thoughts on
Thx chuck.
Hi Chuck. You show that ALTRIA has a "blended PE" of 9.62 while others (Yahoo Finance, MarketWatch, etc) are showing PEs around 18 or so for this stock. Just what is "blended PE". This can make a big difference to someone looking to purchase this stock based on valuation. Thanks
1st, other sites are using diluted or GAAP earnings and measuring them TTM (trailing 12 months). here is a more comprehensive definition: "There are several factors that will cause financial websites to report different P/E ratios. For starters, you must be cognizant of the specific earnings metric that is being utilized. Many sites will utilize diluted (GAAP) earnings when they do the calculation.
FAST Graphs defaults to “Adjusted (Operating) Earnings.” However, “Diluted Earnings (GAAP)” are available with FAST Graphs along with three (3) other metrics (“Normalized Basic Tax-Adjusted Earnings” “Normalized Basic Earnings” “Basic Earnings”). We also offer calculations based on Cash Flow or FFO and AFFO for REITs. The following is describing the FAST Graphs blended P/E ratio. This approach is utilized with all the metrics that FAST Graphs offers:
Blended P/E:
One of the simplest and most commonly used ways to determine the value of a publicly-traded business is by checking the company’s P/E ratio. The formula is very simple, it is simply the current price (P) divided by earnings (E). At first glance, this seems simple enough, but often it is not as simple as it appears.
The company’s stock price is reported in real time on most financial websites that offer a quoting service. But businesses only report earnings on a quarterly basis. Consequently, when we are between the quarterly reports, we really don’t have a precise earnings figure upon which to calculate the P/E ratio.
As a result, not all financial websites report the P/E ratio on the same basis. Some will report P/E ratios based on trailing twelve month earnings (ttm), others might report the P/E ratio based on forward earnings, and some will report P/E ratios on both.
Unfortunately, this can lead to a common mistake that is often made when looking at a P/E ratio on a quoting service. The price or numerator (the top number) is current and accurate. However, it is the earnings or the denominator (the bottom number) that can be problematic. If you are using trailing earnings (ttm), your denominator might be too small, thereby causing the P/E ratio to be higher than it really is. If you are using forward earnings, they might not manifest as expected, thereby causing the denominator to be too large, which makes the P/E ratio calculation look lower than it truly is.
Consequently, FAST Graphs calculates the current P/E ratio by taking a blended approach. Admittedly, like the trailing or forward calculations, a blended P/E ratio might not be perfectly accurate either.
However, we do believe that a blended P/E ratio calculation will be more precise than the two other alternatives. Trailing twelve months’ earnings can be getting stale, especially when we are in the late innings of the next quarter. Earnings estimates out to the next year may be too optimistic. However, giving credit to the current quarter’s earnings estimates are more likely to be realistic or close to it.
Here it is important to note that it takes companies approximately 45 days after the close of the fiscal quarter before the actual numbers are reported. Consequently, it is possible that a trailing twelve month number might be 4 ½ months old.
Therefore, by blended P/E ratio, we mean a weighted average of the most recent actual reported earnings plus the closest quarterly forecast earnings. This gives the most weight to the past “actual” reported earnings, but also includes an appropriate consideration of the company’s continuing earnings power post their last report. For most companies, the blended P/E ratio calculation will be using a moderately higher denominator than trailing twelve months. In other words, we believe the blended P/E ratio calculation is based on a more current level of earnings.regards, Chuck
@@FASTgraphs Thank you for the excellent and timely response, Chuck. I'm currently going through the 7 day trial and am very much impressed with how making everything very visual is extremely helpful to assessing a stock.
3M lose vs Jury, could be hard time.
Hey Chuck, loved your presentation as an intro, very well explained :)
How do you factor in the debt levels of these companies into your evaluation? I personally consider DIS and SWK as companies that carry rather high levels of debt…Could you maybe go into FUN graphs and focus on debt? :)
Yes, you could go into FUN and/or the financial statements or even the health check. However, as a overgeneralized statement American companies have taken on more debt due to the low interest rates. In short they are earning much more on the capital then it cost them to obtain it. Cash flows are also an important consideration. Regards, Chuck
Good job!
Hi Chuck, new subscriber here and love the vids/analysis. Would you possibly have a look at the company, Smith and Wesson (SWBI); they are a small cap arms manufacturer (controversial), low PE ~4, 3% dividend, and perform significant stock buybacks. Best wishes,
In Chuck we trust.
Thanks Chuck always love your input but MMM is too risky. Too many issues with PFOA and PFOS and now the earplug issue.
if you buy a stock then it goes down and you don't want to buy more - you bought the wrong stock.
Hey chuck
One more bit of information for you than concerns me. I have reason to believe that MMM is going to be involved in thousands maybe millions of lawsuits in the coming years .the latest is over firefighter equipment using a chemical PFAS. I just wonder if our money is better getting out of 3m altogether?
Your thoughts please
Thanks , jeff
litigatiion risks are real and already priced in in my opinion. Firms like MorningStar are recognizing these risks but consider them manageable and the long-term. When stocks like 3M become inexpensive there are always reasons. The question is whether they are long-term detrimental or surmountable. Remember, there is no substitute for comprehensive research and due diligence. Regards, Chuck
If you're in possession of inside information as you claim, you should be working 24/7 with a team of attorneys, not wasting your time posting TH-cam rumors.
@@FASTgraphs , Excellent video again. Am sorry that you left The Dividend Kings as you added great value to that service I've been subscribed to for about 3 years now and am considering subscribing to yours. Concerning 3M, readers need to do new research on it as the Texas 2 step spinoff affects litigation costs ala a certain (Pharma company) recently and recent scientific discovery on high temperature water treatment regarding PFAS. With that said, I disagreed with Adam at first and sold nearly half of MMM saying that I agreed with Nick about similar opportunities with less risk. Now with recent developments am holding the rest for more information before committing more capital, at more likely a better entry point. Building dry powder on the rips by rebalancing as I believe Mr Market has another leg lower when earning revisions come out in September. Respectfully, Retired Dal Amt 🇺🇲🙏😎
@Jeffery Hinson, see my reply to Chuck above ☝️
Amen.Thank you
Keep up the excellent work Chuck
Mo is the best play here because of the possiblity of legalized marijuana.
Google is not so good because of adblockers.
Buy the dip that keeps on dipping and go broke. Read charts before you buy. Period. Or wait several years to possibly recoup and miss market leaders. The opportunity cost is real and so are the risks. But if income focused I guess SLOW growers like most of these are OK. The only one in the video even worth considering really is CMCSA. Read a chart though.
Hey Chuck If you do a deep dive on Stanly back and decker again could you cover the different tickers. One of them has monster yeild of 8%
You said in a previous video that Comcast might be a good company to own, but that I should do my own due diligence before investing. So I immediately put my entire life savings in the stock without looking at any earning figures. Hours after I bought it, the stock price declined 0.03%, so I quickly panic-sold and used the money to buy electronic photos of monkeys instead. Now those monkey jpegs are worthless and I’ve lost my entire life savings. This is all your fault.
,,🤣🤣🤣🤣🤣
You're story made me lough so much that my stomach hurt now I feel sick is all your fault!
The problem is the that the FED seems to decide if stock markets rallye or crash as you can even today.
Fundamentals seem to get more and more unimportant.
The other problem ist, that forecasts can be completely wrong or much to optimistic as you can see now.
Massive recession incoming 😞
Many weak years of downturn are mentally budensome...
I must respectfully disagree from the long-term perspective. In the short run that may be true as I indicated in the video. However, only fundamentals are lasting. Emotions and artificial constructs like you mentioned tends to be short-lived. This is happened many times in the past and always gives out to fundamental value. Every known bubble as eventually burst as a result. Regards, Chuck
But sometimes you get a world class company that permanently turns into a lemon like GE and then this method falls flat on its face.
fundamental investing is not a method it's a process. In fact, it's the only strategy that lets you spot deteriorating fundamentals early enough. Finally, in the aggregate world class companies do not let you down, but there is an exception to every rule. Regards, Chuck
@@FASTgraphs , Chuck would like your thoughts on EDV , CMI , QCOM , and TSM. Thanks.
@@FASTgraphs The fundamentals of SWK are currently deteriorating but you aren't exiting. How do we know it isn't another GE?
@@opentrunk Do you own research and decide on what you learn.
@@FASTgraphs Yes, I've done that and decided that it's very likely to go quite a bit lower along with the whole market as we enter a recession in the next 0-1.5 years
My how some Fed speak can change the equation. Don’t fight the Fed.
Burt: elaborate please. Thanks, Chuck
MMM dropped 10% today. Would take 2 years of dividends to regain that loss. More losses likely coming due to Fed rate hikes and likely recession. Doubling your investment will take longer in this environment.
@@bhbaker220 This environment is why I also own some bonds. Stocks will probably bounce back in one to three years and bonds help smooth things out in the meantime. I set my portfolio up with my desired asset allocation and then I don't worry about the crazy gyrations that Mr. Market goes through periodically.
Too many day traders they don't have the patience to hold a stock
1st
Self respect is important