Tag Archives: Factset

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

 

 

 

 

 

May 2017 Podcast Video, Financial Planning Tax Review and Earnings Update- By John Kvale

The School years are finally finishing up…

Summer is beginning across the country…

While moving slower, business is still going on…. let’s review!

But First our 22cnd Annual Holiday Party Announcement!

November 18, 2017 at The Dallas Texas Arboretum from 1-3 PM – Food and Fun – Enjoy the park until 5 pm!

12Nights1

 

Here is the review!

May 2017 Video

 

Financial Planning Tip(s)-

Credit Reportcredit-40673__340

With today’s technology, it’s no surprise more data is being used by everyone from our Mortgage companies to our Insurance carriers to set rates charged to us.

Given the comprehensive use of our data it has become even more important to guard our credit reports.

In our post here, we discuss the importance of watching our credit and how to check your credit report as well as getting a copy of your report, along with ways to dispute difficiences as well.

Sharing your financial life without giving up control

In this post, one of the most popular of the month, we discussed the ability to give access to your financial life, but not control, to someone.

Our job is of course to always know where everything is located and help carry the spirit of your wishes, but the sharing option of our New Total Vault may be an easier introduction to the subject matter, should you desire to bring it up on your own.

You may even want to have a subtle suggestion for the access to a special person in your life …. we have you covered with our New Total Vault.

Capital Market Comments

Employment Update

With over two thirds of our GDP (Gross Domestic Production) aka broad measure of our economic growth, being consumer related consumption, an employed and happy consumer may likely lead to better growth prospects for the US Economy. Here is the full review!

The consumer is certainly employed, as shown by this chart of the falling unemployment rate!

img_0792

Hello Swimming Pool, talk to you at the end of June !

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,

Earnings, the key to Capital Market Growth … Let’s get an update?

The ultimate driver of Capital Markets are Earnings. Yes, we can argue about interest rates, currencies, world political and economic cycles, but all of these events are only important in how they change earnings or the growth there of “Earnings”.

Let’s take a look at early statistics from 2017!

Earnings Via our Friends at Factset

This from Factset, one of our favorite data aggregators in their regular weekly report.

  • Earnings Growth: For Q1 2017, the blended earnings growth rate for the S&P 500 is 13.6%. If 13.6% is the actual growth rate for the quarter, it will mark the highest (year-over-year) earnings growth for the index since Q3 2011 (16.7%).

Looking closely at the following chart, which is TRAILING earnings, forward looking capital market expectations can be seen. The trailing earnings are actually falling over the last few years, but the forward expectations as noted from the first bullet above are expected to climb more rapidly than the past six years.

5-12-17 Factset EPS change and Price

 

So just where are these revenues that are creating accelerating growth coming from?

5-12-17 Factset Geographic Rev chart

P/E or the Price to Earnings is the most blunt way to measure the valuation of capital markets. A high P/E might mean markets are overvalued and need to grow into their valuations, or a reversion to the mean reset to a lower level may be in the cards.

5-12-17 Factset 12 PE ratio V long term

From Factset’s estimates above, the current market P/E is about 22 with a normal of 16-17, undoubtedly higher than normal but certainly no guarantee of an imminent reversion down to lower levels.

If the growth estimates mentioned in the very first bullet come through in 2017, much of this froth may be taken out of the capital markets.

Either way, we have your back via our good friend diversification!

There you have it, a nice ‘Earnings Update” … We will be watching closely!

Have a great “Earnings Update” 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

April 2017 Podcast Video, Financial Planning Tax Review and Earnings Update- By John Kvale

Whew, that was easy…. tax season is finally mostly over ….

We wanted to look back one last time on our personal taxes before we sunset those tax strategies for the high point of the season….

As a reminder,  we started with an Audio Podcast format for those that are unable to SEE the video or just prefer to listen to the audio… this makes the review slightly longer, but more descriptive.

Enjoy!

April 2017 Video

 

Financial Planning Tip(s)-

AMT Tax Reminder

We ran across a lot of AMT or Alternative Minimum Taxes this season

Here are the key thoughts from our detailed post on AMT earlier this month-

  • Incomes between $170k and $313k joint and singles over $100k – you are in the cross hairs of AMT
  • Deferring income may be useful
  • Accelerate income

There is not a lot of planning changes with AMT, but in this case knowledge may be power!

Possible MAJOR tax reform

Late in the month an overview of major tax reform was released.

Here is a link from the White House

Here is a link from Barron’s that does a pretty good analysis

Here is our article on the possibilities earlier this month

What to do if you overfund your 401k/retirement plan

In our overfunding 401k post here, we discuss how your 401k/retirement plan can get overfunded….. here are the main points

  • Refund the extra amount ASAP
  • Apply the extra to the new year
  • If its a super small amount, its not the end of the world

Capital Market Comments

First Double Digit Earnings growth since 2011 expected

From our friends at Factset, who do a terrific job of outlining historic and future earnings.

Earnings are the ultimate driver of capital markets!

4-27-17 SP earnings estimates - Factset

What is nice about these estimates are that historically companies have been beating the street estimates … if this continues, the actual earnings may be even better double digit growth…. time will tell and we will be watching!

Hello May!

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,

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

 

 

 

 

 

 

 

Oil and Energy? Factset Estimates

No doubt energy has been left for dead.

Why hold energy investments as the world crashed around them?

There will be more pain…BUT

Three charts from Factset, an accumulator of estimates and reports:

Energy certainly has the lead in earnings surprises

4-29-16 Sector level surpises

Wow…..

Of course it is not all peaches and cream … THIS year’s estimates:

4-29-16 2016 Growth Estimates

Next Year’s Estimates …

4-29-16 2017 Growth Estimates

Wow….did we say wow !

What if they are only 50% correct ? Of course coded forecast !

Never go “All in or All out!”

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

 

90 Day Treadmill AKA Earnings Begin

We coined the presenting of earnings each 90 days the “90 Day Treadmill” some years ago. While we like to see the earnings, many compromises occur with such “Short-tism” Wall Street puts on companies. Treadmill

Miss an 90 day checkup, frequently Wall Street Punishes the company way too much in many cases … Oh we digress…

Earnings Season Update

Here are the latest expectations from Factset:

Total Earnings are set to fall almost 10%, heavily influenced by Energy.

4-15-16 Earnings Exp - Factset

Sales- Revenue Expectations – Once again heavily influenced by Energy, but Sales are hard to come by in our current economy.

4-15-16 Revenue Exp - Factset

So earnings are weak, sales as well … A logical question would be – “Why are the capital markets hanging in so well ?”

Capital Markets Look ahead, and analysts are pretty high on the remainder of the year – meaning, they are expecting nice bounce back growth- Again from our friends at Factset

4-15-16 Earnings By Quarter to 1-17 - Factset

If managers are able to keep in line with expectations, all clear…if forecasts are weaker… expect more chopiness !

The great news is our digital forecasting diary has it recorded for review later in the year … when forecasts become reality!

Have a Happy Monday…sorry for being so heavy !

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