Year Rptd Inc Approx Value of Issued Options 2003 .. 60M ... 5M 2002 .. 40M .. 15M 2001 .. 30M .. 30M
Estimated Income Net of Issued Options: 2003 55M 2002 25M 2001 - Mean: 23M Shares outstanding: 42M Trailing-three-year average EPS less value of options issued: $0.55
And even so, lots of consultants are very unhappy (quitting), so the adjusted EPS is at best representative of future compensation costs.
So the $14 share price isn't necessarily a great bargain. Those reported earnings were achieved via huge option compensation costs not reported in the financials. (Legal but a bad deal for the corporation.)
Thanks for the info. At least the options expense is trending in the right direction. Further, with the cratering of the stock price, many of the options are out of the money. (Of course, this may lead to more departures.)
There's clearly some risk, but I thought it was worth taking a small position before the earnings announcement given the rock-solid balance sheet and the earnings potential.
FCN was written up on ValueInvestorsClub as a short last April at $30. The writer nailed the trouble lurking under FCN's hood despite the fact that FCN management at the time promised clear sailing ahead. The writer is still bearish on FCN. I have no opinion on the issue, but you can read the writeup and ensuing discussion at the ValueInvestorsClub web site.