Corporate earnings are also referred to as “company earnings” and “corporate profits:” basically, the amount of money a company makes in certain period of time. The price/earnings multiple is still the most common tool used to value a company. The stock market values a company based on the amount of money—the earnings and profits—the company has after all expenses, including taxes, have been paid. In a stock market where stocks are traded at an average of 12 times earnings, a company making $1.00 a share per year would be valued at $12.00. All things being equal, the more money a public company makes, the higher its stock price.
As this issue goes to press, the Dow Jones Industrial Average is down for the year. Yes, 70 days into the year, we’ve seen the stock market move up to new highs and we’ve seen stocks move back down. The bottom line is that stocks are lower today than when the year opened. This is consistent with my 2015 outlook that stocks are overpriced. Read More
Since the beginning of the year, key stock indices have been experiencing wild swings. One day they are up significantly, and the next day, all the gains made are lost. The opposite is true, too; one day down big-time, and the next day back up.In the past, we have seen this sort of pattern develop when stocks or commodities are forming a top.. Read More
Which DOW stock just hit a home run with its earnings? It was The Walt Disney Company (DIS), reporting another strong quarter in terms of its parks and resorts, consumer products, and media networks. It was a solid quarter for the company and the stock soared on the news, helping out the Dow Jones Industrial Average tremendously on a down. Read More
A stock market can’t move higher if the companies listed on that market are not posting earnings and revenue growth. American companies are stuck on both fronts right now.Corporate Earnings Dismal, Revenue Growth EmbarrassingAs of January 23, 90 companies on the S&P 500 have reported their corporate earnings for the fourth. Read More
Large-cap earnings were pretty good this quarter, just like they were in the second quarter of this year.The Walt Disney Company (DIS) was one of them. Notable in the company’s solid fiscal fourth-quarter and year-end results was its huge jump in profitability.While total fiscal 2014 sales grew eight percent to a record $48.8 billion,. Read More