[CANSLIM] Ask Bill/DGO & IBD EPS numbers

From: "Katherine Malm" <kmalm@earthlink.net>
Subject: [CANSLIM] Ask Bill/DGO & IBD EPS numbers
Date: Mon, 18 Feb 2002 13:55:53 -0600

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Not that it hasn't come up in discussion here on the list already, but just
thought it was worth reiterating when viewing the DGO/IBD numbers:

Ask Bill O'Neil 02/19/02

 Q: Are IBD's EPS Ratings based on GAAP reported earnings or pro-forma?
- - Submitted from Vienna, Ala.

 A: The Earning Per Share (EPS) Rating measures a company's short- and
long-term earnings growth rate. The profit figures on which we base the
rating are "normalized" earnings per share, which are a type of pro forma
results. These don't always conform with Generally Accepted Accounting
Principles (GAAP), but they better reflect a company's ongoing operations.
Specifically, the after-tax amount of one-time gains and charges,
extraordinary items, and other nonrecurring items are backed out of net
income by our research staff in order to arrive at a "normalized" figure.
Our studies have found that the normalized figure is the most appropriate in
analyzing a stock's past earnings growth and its potential going forward.



Katherine


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