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Cendant Corporation (CD) Message Board

fuzzhead72 8 posts  |  Last Activity: Apr 29, 2015 10:43 AM Member since: Dec 18, 1999
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• 2 users liked this posts users disliked this posts 1 Reply The Intelligent investor and Lumber Liquidators

I'm currently reading The Intelligent investor, by Benjamin Graham. On pages 54-55, he outlines a formula to use to evaluate a company to make sure you aren't overpaying for it. I thought it would be interesting to apply this to Lumber Liquidators.

The first test he uses is to find an average earnings per share for the past 7 years, and not to pay more than 25 times that. A 7 year check of LL earnings per share gives us:
.82, .97, .93, .93, 1.68, 2.77, 2.31 = average earnings of \$1.48 over the period
25 times \$1.48 equals \$37

This means that the first test would tell us not to pay more than \$37 for a share of LL.

However, there is also a second test, which says not to pay more than 20 times the earnings for the prior year period. Earnings for 2014 were \$2.31 per share. Using that metric, we should not pay more than about \$46 per share for the company. Over the past 12 months, adding the 29c earnings loss just announced, we get earnings per share of \$1.53. Multiply that by 20 and you get \$30.60 per share.

The \$30.60 per share is the lowest number, so it should be used. According to The Intelligent Investor, we should not pay more than \$30.60 per share for LL.

negatives: cyclical drop in sales, negative perception lingering probably 18 months

positives: chain store growth continues, profits were fairly level to growing before 60 minutes report,
study cited in that report is likely quite biased and flawed

earnings per share?

by fuzzhead72 Apr 23, 2015 10:04 AM

I understand, but in order to truly evaluate the entire ETF using the earnings formula found in the book "The Intelligent Investor", I would need to know the overall earnings, correct? The only way I can think of to find this for an ETF would be to add up all the outstanding shares of stock in all of the companies. Next, I guess I would add up all the earnings for all of the companies, right? Then I suppose I would divide the total earnings by the total shares of stock to find the total earnings per share. I was just hoping that someone else might have already done this.

• 0 users liked this posts users disliked this posts 1 Reply earnings per share?

Has anyone caculated the earnings per share for GREK?

• 4 users liked this posts users disliked this posts 0 Reply Glad that WLL went this route

I am so glad that WLL decided to temporarily shore things up like this for a couple of years, rather than accepting a bad offer to sell the company. Sure, I don't love the stock plunge, but we are pretty much back to where I bought back in January. If oil goes back up over the next couple of years, they can then get a much, much better deal for the company.

I was really afraid that this would turn into another "Century 21" stock. I invested in that, and then it was taken private. I didn't really lose anything, but the private company ended up making all of the profits that I was hoping to get long term.

Disney stock split coming?

by fuzzhead72 Mar 12, 2015 4:51 PM

My guess December 2015.

• 1 users liked this posts users disliked this posts 0 Reply Disney stock split coming?

With the Marvel, Star Wars and Frozen money continuing to pour in, I think that it is looking more and more likely that a stock split is in the future. Anyone care to guess the month that it occurs?