http://www2.standardandpoors.com/spf/xls/index/SP500EPSEST.XLS That’s the official number. Back in the dotcom days, it was 46x. Is the market way overpriced now???
Don’t know about overpriced, but it’s not cheap, that’s for sure.
it looks like a “big bath”
What was the earnings number for June 30th, 2009? Anyone knows?
ymc Wrote: ------------------------------------------------------- > What was the earnings number for June 30th, 2009? > > Anyone knows? Go to standardandpoors.com
bromion Wrote: ------------------------------------------------------- > ymc Wrote: > -------------------------------------------------- > ----- > > What was the earnings number for June 30th, > 2009? > > > > Anyone knows? > > Go to standardandpoors.com Well, the link I posted was from there…
Molodovsky Effect
The TTM S&P P/E is still very high. Look at the Forward P/E. That’ll give you a much better picture.
That’s a trailing P/E that included the only negative EPS quarter in the entire time series since 1988, and a huge one at that. This is why trailing P/Es are useless. No way to tell from this data but I’d suspect it was in a normal range on a forward P/E basis. Plenty of earnings suprises on the upside coming out which is justifying current levels. I’ll be a believer when profits are coming from revenue growth and not cutting costs to the bone.
Is the number a weighted average? The weighted average P/E is a weird metric. A couple months ago, a company in the R2000 had a P/E of 439,000X or so. It waroed the R2000 P/E. Index weighted average Earning and cash flow multiples can be rendered meaningless by a few outliers. If that number is a weighted harmonic average or a weighted median, the we have problems.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aNRNQsJITYkQ Just one way of looking at forward numbers…
http://www.bloomberg.com/apps/news?pid=20601087&sid=aNRNQsJITYkQ Wall Street firms raised forecasts on Standard & Poor’s 500 Index companies 896 times in June and lowered 886, according to data compiled by JPMorgan Chase & Co. The last time analysts were bullish on a net basis was in April 2007, before more than $1.5 trillion of bank losses tied to subprime loans spurred the first global recession since World War II, the data show. Wall Street firms estimate the S&P 500 will earn $74.55 a share next year, up from $72.54 in May. Stocks now trade at 13.13 times estimated profit, indicating a 26 percent increase in the S&P 500 should the index return to its five- decade average of 16.54 times annual income. 16.54*74.55= 1233
Chuckrox8 Wrote: ------------------------------------------------------- > The TTM S&P P/E is still very high. Look at the > Forward P/E. That’ll give you a much better > picture. Where can I find an “authoritative” forward P/E? Anyway, let me make an educated guess. Suppose the ratio between S&P 500 forward P/E and trailing P/E should be similar to GS. Then the forward P/E of S&P 500 should be 116.31*10.19/36.82 = 32.19. 32.19 is still a number in the dotcom days. From 2004 to 2007, the range was 17-22.19
dzmfntz Wrote: ------------------------------------------------------- > http://www.bloomberg.com/apps/news?pid=20601087&si > d=aNRNQsJITYkQ > > Wall Street firms raised forecasts on Standard & > Poor’s 500 Index companies 896 times in June and > lowered 886, according to data compiled by > JPMorgan Chase & Co. The last time analysts were > bullish on a net basis was in April 2007, before > more than $1.5 trillion of bank losses tied to > subprime loans spurred the first global recession > since World War II, the data show. > > Wall Street firms estimate the S&P 500 will earn > $74.55 a share next year, up from $72.54 in May. > Stocks now trade at 13.13 times estimated profit, > indicating a 26 percent increase in the S&P 500 > should the index return to its five- decade > average of 16.54 times annual income. > > 16.54*74.55= 1233 http://www.multpl.com/s-p-500-earnings/s-p-500-earnings.csv 74.55 will put it between the earnings of Oct 07 and Nov 07. That was about the time Countrywide started its own unraveling. So basically the Wall Streeters are saying we can go back to the go-go days in a year when most mainstream economists think the recovery will be a jobless one for several years???
I’d try and look at it on an EV/EBITDA basis a lot of restructuring/goodwill impairment/one-time/noncash charges embedded in trailing earnings… just my opinion but it seems irrelevant to compare H1 '09 with historic trailing p/e ratios
ymc Wrote: > So basically the Wall Streeters are saying we can > go back to the go-go days in a year when most > mainstream economists think the recovery will be a > jobless one for several years??? Hey it worked coming out of the last recession. Companies wring out the excesses and increase productivity. who needs jobs?? note the sarcasm. I think the stimulus is/will give false hope for a strong recovery. Deleveraging will be long and painful and will drag on growth for years to come IMO.
As of this morning, JP Morgan’s weekly market commentary lists a Forward P/E of 15.21. That’s probably a little bit on the pricey side.