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As of today, ITT Corp's current share price is $43.76. ITT Corp's E10 for the quarter that ended in Dec. 2013 was $5.27. ITT Corp's Shiller P/E Ratio for today is 8.50.
During the past 13 years, ITT Corp's highest Shiller P/E Ratio was 8.50. The lowest was 1.62. And the median was 3.29.
E10 is a concept invented by Prof. Robert Shiller, who uses E10 for his Shiller P/E calculation. E10 is the average of the inflation adjusted earnings of a company over the past 10 years.
ITT Corp's adjusted earnings per share data for the three months ended in Dec. 2013 was $0.123. Since most companies do not have as long as 10 years history, here we use 6 years to calculate. Add all the adjusted EPS for the past 6 years together and divide 6 will get our E10, which is $5.27 for the trailing six years ended in Dec. 2013.
For the Shiller P/E, the earnings of the past 10 years are inflation-adjusted and averaged. The result is used for P/E calculation. Since it looks at the average over the last 10 years, the Shiller P/E is also called PE10.
The Shiller P/E was first used by professor Robert Shiller to measure the valuation of the overall market. The same calculation is applied here to individual companies.
ITT Corp's Shiller P/E Ratio for today is calculated as
|Shiller P/E Ratio||=||Share Price||/||E10|
ITT Corp's E10 for the fiscal year that ended in Dec13 is calculated as:
For example, ITT Corp's adjusted earnings per share data for the three months ended in Dec. 2013 was:
|Adj_EPS||=||Earnigns per Share||/||CPI of Dec. 2013||*||CPI of Current|
Since most companies do not have as long as 10 years history, here we use 6 years to calculate:
Current CPI = 236.511.
ITT Corp Quarterly Data
|per share eps||1.170||-5.664||0.030||0.180||0.780||0.347||0.220||0.280||4.690||0.121|
|per share eps||2.020||2.200||0.640||2.157||1.580||2.560||1.560||2.983||1.310||1.820|
|per share eps||1.880||2.400||2.360||2.036|
Add all the adjusted EPS together and divide 6 will get our E10.
Compared with the regular P/E ratio, which works poorly for cyclical businesses, the Shiller P/E smoothed out the fluctuations of profit margins during business cycles. Therefore it is more accurate in reflecting the valuation of the company.
If a company has consistent business performance, the Shiller P/E should give similar results to regular P/E.
Compared with the P/S ratio, the Shiller P/E makes the comparison between different industries more meaningful.
The Shiller P/E assumes that over the long term, businesses and profitability revert to their means. If a companys business model does not work in the future compared with the past, the Shiller P/E and P/S ratio will give false valuations.
ITT Corp Annual Data
ITT Corp Quarterly Data