Way IV
Detecting earnings acceleration
This way requires knowledge of accounting and some quantitative skills, as well as time to apply them. You must also be willing to accept some risks. It is most appropriate for type 2 and 3 personalities.
What topics are covered in this chapter?
- How the stock market values a company
- How do companies attract a high price/earnings ratio?
- Market values, share prices and earnings per share
- So what?
- Does re-valuation of a share happen overnight?
- How to back the horse after the winning post
- Why do PE ratio changes lag behind earnings rises?
- What sort of earnings growth are we looking for?
- Identifying prima facie ‘accelerators’
- Verifying the history
- Assessing future profit trends
- The investment decision ...
Get The Financial Times Guide to Selecting Shares that Perform, 5th Edition now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
