<\/p>\n
Per Thomson Reuters’s, “This Week in Earnings” the forward 4-quarter EPS estimate fell $.07 this week to $127.00 even, from $127.07 the past two weeks.<\/p>\n
The forward p.e ratio as of Friday, August 1, 2014 is 15.2(x).<\/p>\n
The PEG ratio this week fell to 1.58(x) from last week’s 1.65(x). (We recently upgraded our desktop PC and converted all our Microsoft applications to Office 365. The conversion, which occurred around July 11th, altered some of our formula’s in the spreadsheet (and i’m not sure if it was my error, or something about the conversion itself that altered the formula’s), but one of our calculations ended up picking up the next column over as the numerator on eth PEG calculation since July 11th. Here are the correct PEG ratio’s for the last 4 weeks in the first column, and this is what we initially reported on the blog, until the error was caught:)<\/p>\n
Week of 8\/1: 1.58 vs 1.58 (correct formula)<\/p>\n
Week of 7\/25: 1.65 vs 1.76<\/p>\n
Week of 7\/18: 1.76 vs 1.82<\/p>\n
Week of 7\/11: 1.82 vs 1.82<\/p>\n
Thanks to the 2.70% decline in the SP 500 this week, the earnings yield on the SP 500 rose to 6.6%, versus last week’s 6.42%.<\/p>\n
Here is the very pleasant surprise: the year-over-year growth rate of forward earnings has started to accelerate: this past week’s y\/y growth rate was 9.58%. Because we had formulaic errors with the growth rate calculation, our previous calculation was actually understating the improvement in the y\/y growth rate. Here is the last 4 week’s actual y\/y growth rate versus what we originally reported:<\/p>\n
Week of 8\/1\/14: 9.58% vs 9.58% (correct formula and calculation)<\/p>\n
Week of 7\/25\/14: 9.41% vs 8.85%<\/p>\n
Week of 7\/18\/14: 8.57% vs 8.85% (of all the metrics recalculated, only\u00a0the week of July 18th was lower\u00a0with correct formula)<\/p>\n
Week of 7\/11\/14: 8.53% vs 8.51%<\/p>\n
The point being that the y\/y growth rate has actually been understated the last few weeks.<\/p>\n
The actual y\/y growth rate in the forward 4-quarter estimate as of 8\/1\/14 (as measured against 8\/2\/13’s forward estimate of $115.96) is now 9.5%, and more importantly, keeps growing. (Whether we carry out the calculation to 1, 2 or 3 decimal places is subject to debate. I prefer two decimal points if only to get the illusion of precision. Remember too,\u00a0earnings can be restated\u00a0historically.\u00a0)<\/p>\n