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Discussion Starter · #1 ·
I'm trying to apply the concepts from Peter Lynch's book One Up on Wall Street and am having a little trouble with the wording he's using.

He's asking "What is the record of earnings growth to date? Are the earnings sporadic or consistent."

From what i can figure out this information can be sourced off Yahoo's "PEG RATIO (5 yr expected)" value in their Valuation Measures section of the HAL stock. But I am not certain. I have a feeling I'm looking at two different measurements here?

Can anyone confirm this PEG Ratio is what Peter is referring to or better yet show me how to get the "Record of earnings growth to date" information?

btw I know HAL is not a great stock to be learning this from (due to it's size - complexity) but it's in my portfolio and I have decided to apply Peter's book to my currently holdings.....

Thanks in advance.
 

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Morningstar.ca can be useful for this.

I don't know much about the PEG ratio, but to see if earnings are growing and are sporadic or consistent, you can look at their Morningstar data and see the history of earnings. Your broker probably also has this data, at least if you are with a big bank broker. I know WS Trade doesn't have it, and I'm not familiar with Questrade/QTrade/etc.

So for HAL, Morningstar says their EPS looked like this:
2016: -6.69
2017: -0.53
2018: 1.89
2019: -1.29
2020: -3.34

I would definitely say this is sporadic at best. They lost money in five out of six years. From 2016-18 the trend was upwards so they were growing earnings, and they broke through into profitability, so in 2018 it might have seemed like a good idea to buy the stock. But then in 2019 things declined, and in 2020, even worse (to be fair, 2020 might have been covid-related).

Did that help? You can also look at the data by quarter if you want a shorter term view.
 

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Discussion Starter · #3 ·
Morningstar.ca can be useful for this.

I don't know much about the PEG ratio, but to see if earnings are growing and are sporadic or consistent, you can look at their Morningstar data and see the history of earnings. Your broker probably also has this data, at least if you are with a big bank broker. I know WS Trade doesn't have it, and I'm not familiar with Questrade/QTrade/etc.

So for HAL, Morningstar says their EPS looked like this:
2016: -6.69
2017: -0.53
2018: 1.89
2019: -1.29
2020: -3.34

I would definitely say this is sporadic at best. They lost money in five out of six years. From 2016-18 the trend was upwards so they were growing earnings, and they broke through into profitability, so in 2018 it might have seemed like a good idea to buy the stock. But then in 2019 things declined, and in 2020, even worse (to be fair, 2020 might have been covid-related).

Did that help? You can also look at the data by quarter if you want a shorter term view.
Thanks Spudd this is very helpful!
 

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Discussion Starter · #4 ·
Morningstar.ca can be useful for this.

I don't know much about the PEG ratio, but to see if earnings are growing and are sporadic or consistent, you can look at their Morningstar data and see the history of earnings. Your broker probably also has this data, at least if you are with a big bank broker. I know WS Trade doesn't have it, and I'm not familiar with Questrade/QTrade/etc.

So for HAL, Morningstar says their EPS looked like this:
2016: -6.69
2017: -0.53
2018: 1.89
2019: -1.29
2020: -3.34

I would definitely say this is sporadic at best. They lost money in five out of six years. From 2016-18 the trend was upwards so they were growing earnings, and they broke through into profitability, so in 2018 it might have seemed like a good idea to buy the stock. But then in 2019 things declined, and in 2020, even worse (to be fair, 2020 might have been covid-related).

Did that help? You can also look at the data by quarter if you want a shorter term view.


Hi Spudd
Thanks Spudd this is very helpful!
Hi Spudd, can you tell me if i'm on the right track here....

I'm trying to calculate the PEG Ratio of HAL and compare it to AAPL (HAL is currently struggling while i believe AAPL is quite healthy)

PEG Ratio = P/E Ratio / Earnings per Share Growth

HAL PEG Ratio = -10.08 / -1.99 = 0.05
AAPL PEG Ratio = 32.75 / 4.47 = 0.07

From what i understand the lower the # is the better value the stock is in terms of it's price and it's future growth.
The above two companies appear to have very similar PEG Ratios - Meaning the share price of each of the stocks is low compared to the anticipated earnings of the companies.

Am i missing anything here? Just based on PEG Ratios alone are both these companies essentially equal?

thanks in advance
 

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Sorry, PEG ratio is one thing I've never really gotten the hang of. Hopefully someone else can chime in.
 

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Hi Spudd, can you tell me if i'm on the right track here....

I'm trying to calculate the PEG Ratio of HAL and compare it to AAPL (HAL is currently struggling while i believe AAPL is quite healthy)

PEG Ratio = P/E Ratio / Earnings per Share Growth

HAL PEG Ratio = -10.08 / -1.99 = 0.05
AAPL PEG Ratio = 32.75 / 4.47 = 0.07

From what i understand the lower the # is the better value the stock is in terms of it's price and it's future growth.
The above two companies appear to have very similar PEG Ratios - Meaning the share price of each of the stocks is low compared to the anticipated earnings of the companies.

Am i missing anything here? Just based on PEG Ratios alone are both these companies essentially equal?

thanks in advance
PEG is only useful when both the earnings and growth rate are positive. It is used to compare the relative value of different stocks. The idea is one wants to buy growth companies (hence positive earnings and positive growth rate) and understand how cheap/expensive they are relative to similar companies.
 
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