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The Flip Side of the P/E Ratio

BizIntel — Wed, 25 Feb 2009 12:57:08 +0000

In the last couple of posts we discussed some of the basics of the PE ratio. However, an often more meaningful measurement is obtained by, literally, flipping the P/E ratio upside down. Earnings Yield While the P/E ratio helps us understand the price of a stock relative to its earnings, the earnings yield gives us more of [...]

The P/E Ratio Explained (Part II)

BizIntel — Fri, 30 Jan 2009 13:03:45 +0000

In our prior post (The P/E Ratio Explained Part I) we discussed the various methods of calculating the P/E ratio. However, what does it mean conceptually? Essentially, the P/E should tell you how expensive a stock is based on the earnings of the company. An Example Let’s say you are presented with 2 choices. You have 2 [...]

The P/E Ratio Explained (Part I)

BizIntel — Mon, 26 Jan 2009 13:11:14 +0000

While the economy hovers in a holding pattern of uncertainty - I think it’s a good idea to get back to basics and really understand some of the fundamentals of stocks. So, let’s start with the metric most investors are familiar with: the P/E ratio. The P/E Ratio Explained In a nutshell, the P/E is simply the [...]

2009 Market Outlook

BizIntel — Sun, 18 Jan 2009 15:51:49 +0000

What a year 2008 was. The subprime mortgage crisis and ensuing “credit crunch”, having emerged as an ominous fledgling snowball in 2007, grew into a full fledged avalanche that mercilessly bulldozed the US and global markets. So things have to get better in 2009, right? Well…maybe. Off to a Rough Start Right out of the gate, we [...]

Why We Should Welcome a Wall Street Bailout

BizIntel — Sun, 28 Sep 2008 12:51:10 +0000

Barron’s posted an excellent article this weekend on why the wall street bailout is a good thing (subscription may be required) for the government and taxpayers. Why? The markets & public have assumed that the mortgage-backed securities the government will purchase are far worse than they actually are. In fact, most are senior “tranches” of [...]

Government Bailouts Signal Doom? Think Again.

BizIntel — Sat, 20 Sep 2008 13:06:16 +0000

Much has been made of the disaster surrounding subprime lending and the subsequent government bailouts of large institutions such as AIG. The media has done an adequate job of scaring the masses to death, and many will do (as is human nature) the wrong thing and exit the markets licking their wounds. However, if you can, [...]

Unemployment: As Bad As We Thought…

BizIntel — Fri, 01 Aug 2008 12:47:09 +0000

While it’s no surprise that unemployment continues to plague the US economy - we certainly don’t need more data to confirm the situation. However, in this market even bad news that’s as bad as analysts expect (and not worse) could be good news. That might just be the case with US unemployment data just released [...]

Slowing, Slowing, Gone?

BizIntel — Tue, 29 Jul 2008 13:06:24 +0000

After a two month delinquency in updates we’re back. And, wow - what a market to start writing about again. Since our last post in April, the S&P 500 lost 9% of its value while the Dow surrendered a hefty 11%. In fact, we are knee deep in recession as far as textbooks go - [...]

More of the Same

BizIntel — Wed, 16 Apr 2008 13:02:06 +0000

The US Bureau of Labor Statistics released March Consumer Price Index (CPI) data today, showing that inflation continues to be an issue for the US economy. Overall, prices increased 0.3% in March vs. February and 4% over the last twelve months. Don’t be fooled by the so-called “core” inflation number which shows inflation of 0.2% [...]

A Noble Stock Pick?

BizIntel — Tue, 08 Apr 2008 11:58:53 +0000

It’s no secret that international growth (especially in markets such as China and India) has been driving global energy demand. Per the Economist, worldwide energy consumption will grow about 3.5% by the end of 2008, and oil prices are expected to remain relatively high. However, emerging markets such as Brazil are also playing a pivotal [...]