Tag Archives: Earnings Season

Earnings Review … aka 90 day Treadmill … Revenue the missing link, found?

As mentioned Friday, earnings are the key drivers to asset growth and appreciation.  While we do not want to get into the weeds too much on this, continued growth bodes well for continued market appreciation… and maybe growth into the Frothy valuations.. From our fantastic friends at Factset.

Earnings Growth for the Immediate Quarter Looks Great

While a very short term time frame, (3-5 years is our normal time frame) this 90 day treadmill aka earning season chart shows the move upward in expected earnings growth rate. Continued movement at this rate would certainly help us grow into the current valuations.

 

8-4-17 Factset Earnings Growth Q217

Nice move!

EPS- Earnings Per Share

Ok, sure the EPS Earnings Per Share- solid line is moving down as time has passed for this quarter, BUT, the scale is very narrow and the amount of lowered expected EPS growth is only slightly less…

8-4-17 Factset Change in Q317 eps

Before looking too much into this, the lower line is a tiny move due to the frame size!

Revenue/Sales Growth FINALLY?

Be it the Great Recession lingering effects, demographics, economics, world growth or technological advances, Sales or Revenue has been missing during this economic recovery. In reviewing this chart, Energy, bouncing back from a much lower price just a year ago is making up much of the sales increase, however other sectors are chiming in too. Could this FINALLY be the sales increases we have all been waiting for? Compliments to all company managers for cutting expenses in order to maintain profitability, however there are only so many cuts that can be made. If sales increases continue, this would provide much needed breathing room for managers.

8-4-17 Factset Rev Growth 2017

Sales growth has been absent this recovery, making for HUGE challenges for corporate managers

 

Time will tell! So far its looking good!

Have a Great “Growth in Earnings” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
http://www.jkfinancialinc.com
http://www.street-cents.com

 

 

 

 

 

Earnings, a key driver to Capital Markets/Asset Appreciation … Friday

By a lot of metrics, capital markets may be frothy (our term), overvalued, or some even saying a “Bubble” (WAY over used in our opinion) ..
With a long term average of 15, a 24.6 Price to Earnings ratio (Prices divided by cumulative earnings of the capital market), the bluntest valuation instrument MAY be frothy.

BUT if earnings continue to grow, it would be logical for assets to at least maintain their levels and possibly even continue to appreciate, ESPECIALLY if the future looks bright!

Those steep declines represent a corresponding decline in asset prices… note this chart is going back to the 1800’s … we like long term views such as this…

Next week we will review the “here and now” of earnings and growth/sales  as we are in the middle of the 90 day treadmills we call earnings season….

Ahh… that is next week, today is Friday, enjoy your summer weekend !

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
http://www.jkfinancialinc.com
http://www.street-cents.com

Earnings Update – Good Update!

Earnings are the ultimate driver of higher equity/stock prices. All other items being equal (which they rarely are, but go with me here) better earnings lead to higher stock prices.

Sometimes a low bar that can be stepped over leads to better prices.

As you can see by this busy chart… earnings estimates tend to fall as the year passes.

EPS Dardanelles.png

If we happen to not have a decline in earnings as the year goes on…a surprise  based on everyone getting too negative, maybe prices will trend higher? or at least current higher prices are justified? Not forecasting, only saying!

Check this chart out from FactSet:

8-1-16 FactSet rev chart

Revenue growth has been hard to come by…actually almost impossible, but as this chart notes  something is going on… Could a turn be in the mix?

Another reason never to get too negative or two positive…somewhere in the middle!

Have a Great Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

 

 

 

 

 

 

 

Election Fall … Earnings Season Teaser … Summer Friday

As the conventions wrap up, the parties have “officially” nominated their person. The coming debates are expected to draw more eyes than ever before.

Here are the latest pollster odds …

 

Take your pick!

Earnings

We are heavy into earnings season and the results are trending better than analysts were predicting. Next week we have a busy, but informative chart that shows how regularly earnings start high at the beginning of the year and drop as the year passes….

Ahh…but that is next week… Today is a Wonderful …over-the-mid-point of summer…last business day of July ….Summer Friday!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

 

And they are off … Earnings Season that is, AKA 90 day Treadmill

Earnings are the ultimate driver of stock prices. Yaa yaa, the Federal Reserve as we know all too well also has a hand, but that is a different story.

Most publicly traded companies report in a public venue quarterly. Several years ago we coined the term, 90 day treadmill as it comes at you fast AND can cause short-term knee jerk reactions … another story for a different time.Treadmill

Earnings Season Under Way

As of today we are a little over 10% of the was through, using the S&P 500 as our benchmark.

So how have we done? … Awful, BUT not as bad as expected.

This from our friends at Factset:

  • Earnings Scorecard: Of the 56 companies that have reported earnings to date for Q1 2015, 77% have reported earnings above the mean estimate and 46% have reported sales above the mean estimate.
  • Earnings Growth: For Q115, the blended earnings decline is 4.1%. If the index reports a year-over year decline for the quarter, it will be the first time since Q3 2012 (-1.0%).
  • Earnings Revisions: On March 31, the estimated earnings decline for Q1 2015 was -4.7%. 
  • Valuation: The current 12-month forward P/E ratio is 17.0. This P/E ratio is based on Thursday’s closing price (2104.99) and forward 12-month EPS estimate ($123.94).

Broadly management teams are meeting earnings expectations while still in search of sales!

Just by chance we stumbled upon a terrific interview last week that rhymes with our views by a very famous person on Wall Street. Much of the interview explains eloquently some of the economic growth woes.  Watch for a multiple part weekly Wednesday series!

Have a Great Monday!

John A. Kvale CFA, CFP

http://www.jkfinancialinc.com
http://www.street-cents.com
8222 Douglas Ave # 590
Dallas, TX 75225

 

Earnings Update … Monday Travels (Groundhog) … Birthday Boy

Currently we are smack in the middle of earnings season ….  Guess What ?

They are pretty good, not great, but certainly not bad. Hats off to managers as they maneuver through a sluggish economy and a slightly ill consumer. Well done guys.

We will go deeper soon, but so far so good!

Ground Hog Day Travel

Monday a week ago, on a planned fun turn-around trip , I DID spend 2.5 hours in a plane, but unfortunately never left the tarmac, as storms and low gas canceled both the outbound and return.

Monday we try again. Rain anyone !!!!

Birthday Boy  … Happy 7th

Happy 7th birthday Pierce, seems only yesterday we brought you back from the hospital.Pierce

This is why ….. It’s a Friday, headed into a weekend, I REMIND …enjoy and do not forget to spend time with those special in your life… It goes fast !

John A. Kvale CFA, CFP

PS Some BIG NEWS soon!! Tease Tease

http://www.jkfinancialinc.com
http://www.street-cents.com
8222 Douglas Ave # 590
Dallas, TX 75225 

Earnings Updates … Busy Next Week

Yesterday (7-24-14) there were 50 companies in the S&P 500 (our favorite domestic index) reporting earnings. Making us very much in the middle of earnings season.

Earnings Season – So Far So GoodTreadmill

Coming into this quarter’s 90 day treadmill, AKA earnings season, expectations were for about 5-6% growth. Well….it looks like we are going to do just that. Some may argue the bar was low. Stepping over a lower bar is much better than falling short of a higher bar.

Even though it is earnings season, market participants are scarce based on volume and odd trading patterns.  Over all, so far so good ! More to come after we get farther along.

Due Diligence Meeting

Next week very early on Wednesday I travel to the land of the Longhorn for a due diligence meeting with a major financial firm to review their offerings in person and meet management.  Donald “The Brain” and I have been researching them for about six months now and expect to bring you more information soon.

Ahhhh….but today is a Friday (hot Friday here)  and that means its time to enjoy those special in your life…it’s goes fast…cherish the moments !!

See you next week !

John A. Kvale CFA, CFP

PS I will be on the road for most of early August, working remotely far from the heat as in the past several years, with family (dad & family too), fellow professionals, friends, and cool weather …. tethered heavy electronically.

PSS Correction from last weeks summer reading post, the Mrs. is a Vegetarian, not Vegan.

http://www.jkfinancialinc.com
http://www.street-cents.com
8222 Douglas Ave # 590
Dallas, TX 75225