Switch to:
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Diamond Foods Inc (NAS:DMND)
E10
\$-1.17 (As of Oct. 2015)

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.

Diamond Foods Inc's adjusted earnings per share data for the three months ended in Oct. 2015 was \$0.240. Add all the adjusted EPS for the past 10 years together and divide 10 will get our e10, which is \$-1.17 for the trailing ten years ended in Oct. 2015.

As of today, Diamond Foods Inc's current stock price is \$37.56. Diamond Foods Inc's E10 for the quarter that ended in Oct. 2015 was \$-1.17. Diamond Foods Inc's Shiller P/E Ratio of today is .

Definition

E10 is a concept invented by Prof. Robert Shiller, who uses E10 for his Shiller P/E calculation. When we calculate the today's Shiller P/E ratio of a stock, we use todays price divided by E10.

What is E10? How do we calculate E10?

E10 is the average of the inflation adjusted earnings of a company over the past 10 years. Lets use an example to explain.

If we want to calculate the E10 of Wal-Mart (WMT) for Dec. 31, 2010, we need to have the inflation data and the earnings from 2001 through 2010.

We adjusted the earnings of 2001 earnings data with the total inflation from 2001 through 2010 to the equivalent earnings in 2010. If the total inflation from 2001 to 2010 is 40%, and Wal-Mart earned \$1 a share in 2001, then the 2001s equivalent earnings in 2010 is \$1.4 a share. If Wal-Mart earns \$1 again in 2002, and the total inflation from 2002 through 2010 is 35%, then the equivalent 2002 earnings in 2010 is \$1.35. So on and so forth, you get the equivalent earnings of past 10 years. Then you add them together and divided the sum by 10 to get E10.

For example, Diamond Foods Inc's adjusted earnings per share data for the three months ended in Oct. 2015 was:

 Adj_EPS = Earnigns per Share / CPI of Oct. 2015 (Change) * Current CPI (Oct. 2015) = 0.24 / 237.838 * 237.838 = 0.240

Current CPI (Oct. 2015) = 237.838.

Diamond Foods Inc Quarterly Data

 201307 201310 201401 201404 201407 201410 201501 201504 201507 201510 per share eps -6.555 -1.92 -0.68 -3.63 -0.06 0.24 0.35 0.2 0.246 0.24 CPI 233.596 233.546 233.916 237.072 238.25 237.433 233.707 236.599 238.654 237.838 Adj_EPS -6.674 -1.955 -0.691 -3.642 -0.06 0.24 0.356 0.201 0.245 0.24 201101 201104 201107 201110 201201 201204 201207 201210 201301 201304 per share eps 0.49 0.15 0.126 0.47 -0.93 -2.02 -1.515 -0.49 -0.37 -0.71 CPI 220.223 224.906 225.922 226.421 226.665 230.085 229.104 231.317 230.28 232.531 Adj_EPS 0.529 0.159 0.133 0.494 -0.976 -2.088 -1.573 -0.504 -0.382 -0.726 200807 200810 200901 200904 200907 200910 201001 201004 201007 201010 per share eps 0.161 0.64 0.37 0.16 0.256 0.88 0.52 -0.22 -0.177 0.42 CPI 219.964 216.573 211.143 213.24 215.351 216.177 216.687 218.009 218.011 218.711 Adj_EPS 0.174 0.703 0.417 0.178 0.283 0.968 0.571 -0.24 -0.193 0.457 200601 200604 200607 200610 200701 200704 200707 200710 200801 200804 per share eps 0.2 -0.2 0.214 0.61 0.13 -0.25 0.049 0.52 0.17 0.07 CPI 198.3 201.5 203.5 201.8 202.416 206.686 208.299 208.936 211.08 214.823 Adj_EPS 0.24 -0.236 0.25 0.719 0.153 -0.288 0.056 0.592 0.192 0.077

Add all the adjusted EPS together and divide 10 will get our e10.

Explanation

If a company grows much fast than inflation, E10 may underestimate the company's earnings power. Shiller P/E Ratio can seem to be too high even the actual P/E is low.

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.

Diamond Foods Inc's Shiller P/E Ratio of today is calculated as

 Shiller P/E Ratio = Share Price / E10 = 37.56 / -1.17 =

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Be Aware

Shiller P/E Ratio works better for cyclical companies. It gives you a better idea on the company's real earnings power.

Related Terms

Shiller P/E Ratio

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Diamond Foods Inc Annual Data

 Jul06 Jul07 Jul08 Jul09 Jul10 Jul11 Jul12 Jul13 Jul14 Jul15 e10 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -0.80 -1.16

Diamond Foods Inc Quarterly Data

 Jul13 Oct13 Jan14 Apr14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 e10 0.00 -0.36 -0.43 -0.81 -0.80 -0.76 -0.69 -1.19 -1.16 -1.17
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to \$400 per referral. ( Learn More)