Stock Profits: Getting to the Core—New Fundamentals for a New Age

Key Point: The real difficulty in coming to the proper con-

clusion is in knowing how to interpret the trends. This is

why we need to study more than one indicator—to get a

larger picture of what is happening with the corporation.

The same argument is equally important when the signs are pos-

itive. In examining and interpreting results for Altria or Wal-Mart,

for example, we must be able to verify that what appears to be oc-

curring is in fact confirmed by other related trends. This is the topic

for the next chapter. We use core earnings to express the reported re-

sults on a realistic basis; we then discover trends and interpret them.

The next step ...