{"id":3436,"date":"2014-03-17T23:23:07","date_gmt":"2014-03-17T23:23:07","guid":{"rendered":"https:\/\/fundamentalis.com\/?p=3436"},"modified":"2014-03-21T12:26:13","modified_gmt":"2014-03-21T12:26:13","slug":"3-17-14-sp-500-operating-eps-readers-should-like-this","status":"publish","type":"post","link":"https:\/\/fundamentalis.com\/?p=3436","title":{"rendered":"3.17.14: SP 500 Operating EPS &#8211; Readers Should Like This"},"content":{"rendered":"<p>Attached is a spreadsheet we put together from Thomson Reuters data, which includes the &#8220;history&#8221; or trend in the SP 500 operating EPS estimate for each year, as supplied by Street analysts or Strategists. (See below for a better definition.)<\/p>\n<p>Readers should enjoy this, and frankly after putting it together, it leaves me feeling &#8220;bullish on America&#8221; to steal the old Merrill Lynch slogan from the late 1970&#8217;s and early 1980&#8217;s.<\/p>\n<p><a href=\"https:\/\/fundamentalis.com\/wp-content\/uploads\/2014\/03\/FCSP500OperEPSTrend.xls\">FCSP500OperEPSTrend<\/a><\/p>\n<p>Here are a couple of points worth mentioning:<\/p>\n<p>1.) Note the 2012 actual EPS and in particular the change between March and April &#8217;13. That is the &#8220;truing up&#8221; of the top-down estimate, which is published in the tables and Thomson Reuters data, with the bottoms-ups estimate. The point is, if you&#8217;ve been following my earlier writings on the SP 500 2013 final EPS estimate, when we get to April 1, I expect to see that &#8220;bump&#8221; in the final, actual 2013 EPS for 2013, and the actual number should come in around $110. (Why that matters you&#8217;ll see shortly).<\/p>\n<p>2.) The difference between top-down and bottoms-up estimates per Greg Harrison, who writes the weekly &#8220;This Week in Earnings&#8221; for Thomson Reuters is the following:<\/p>\n<p><em><strong>The top-down numbers are generally done by economists or strategists and are typically the opinion of one individual analyst who came up with the estimate.\u00a0 The bottom-up estimates are the compilation of all the equity analysts individual company estimates.<\/strong><\/em><\/p>\n<p>Instead of paraphrasing, I just copied Greg&#8217;s\u00a0explanation directly from the email.<\/p>\n<p>3.) Note how 2014 already is showing better growth than 2013. I log the estimate linearly, (month to month), but also chart year-over-year growth since that is what drives the p.e multiple (to a great degree);<\/p>\n<p>So what is the point of all this ?<\/p>\n<p>I do think 2013&#8217;s final EPS number will be $110 or a little higher, which then sets our base or denominator for 2014;<\/p>\n<p>I do think we could get to 10% EPS growth in 2014, particularly if the back half of 2014 is strong.<\/p>\n<p><a href=\"https:\/\/fundamentalis.com\/?p=3108\">Here<\/a> was our January\u00a06 &#8217;14 article detailing how the SP 500 could do 20% this year.<\/p>\n<p>I cant definitively promise readers we will see 20% this year.\u00a0I do think the year will be back-end loaded given the elections, with a 2013 final EPS and 10% earnings growth in 2014, and modest p.e expansion would still get us to 20%.<\/p>\n<p>The trend in the above estimates, particularly for 2014, (note the steady increase) is giving me more and more confidence this is &#8220;doable&#8221;.<\/p>\n<p>Thanks for reading.<\/p>\n<p>Trinity Asset Management, Inc. by:<\/p>\n<p>Brian Gilmartin, CFA<\/p>\n<p>Portfolio manager<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Attached is a spreadsheet we put together from Thomson Reuters data, which includes the &#8220;history&#8221; or trend in the SP&hellip;<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[9,93],"tags":[],"class_list":["post-3436","post","type-post","status-publish","format-standard","hentry","category-sp-500","category-sp-500-forecasts"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/3436","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3436"}],"version-history":[{"count":8,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/3436\/revisions"}],"predecessor-version":[{"id":3445,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/3436\/revisions\/3445"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3436"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3436"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3436"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}