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Globecomm Systems, Inc. (NAS:GCOM)
E10
$0.71 (As of Sep. 2013)

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.

Globecomm Systems, Inc.'s adjusted earnings per share data for the three months ended in Sep. 2013 was $0.010. 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 $0.71 for the trailing six years ended in Sep. 2013.

As of today, Globecomm Systems, Inc.'s current stock price is $14.10. Globecomm Systems, Inc.'s E10 for the trailing six years ended in Sep. 2013 was $0.71. Globecomm Systems, Inc.'s Shiller P/E Ratio of today is 0.00.


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, Globecomm Systems, Inc.'s adjusted earnings per share data for the three months ended in Sep. 2013 was:

Adj_EPS=Earnigns per Share/CPI of Sep. 2013*CPI of Current
=0.01/234.149*238.389
=0.010

Since most companies do not have as long as 10 years history, here we use 6 years to calculate:

Current CPI = 238.389.

Globecomm Systems, Inc. Quarterly Data

201106201109201112201203201206201209201212201303201306201309
per share eps 0.0950.4100.4100.1300.3110.1200.1700.1800.1950.010
CPI 225.722226.889225.672229.392229.478231.407229.601232.773233.504234.149
Adj_EPS 0.1000.4310.4330.1350.3230.1240.1770.1840.1990.010
200812200903200906200909200912201003201006201009201012201103
per share eps 0.0500.0300.0480.0600.0700.0600.1880.1000.0800.140
CPI 210.228212.709215.693215.969215.949217.631217.965218.439219.179223.467
Adj_EPS 0.0570.0340.0530.0660.0770.0660.2060.1090.0870.149
200712200803200806200809
per share eps 0.1800.1700.8300.040
CPI 210.036213.528218.815218.783
Adj_EPS 0.2040.1900.9040.044

Add all the adjusted EPS together and divide 6 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.

Globecomm Systems, Inc.'s Shiller P/E Ratio of today is calculated as

Shiller P/E Ratio=Share Price/E10
=14.10/0.71
=19.86

* All numbers are in millions except for per share data and ratio. All numbers are in their own 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 own currency.

Globecomm Systems, Inc. Annual Data

Jun04Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13
e10 -1.04-0.83-0.75-0.380.100.430.520.540.710.74

Globecomm Systems, Inc. Quarterly Data

Jun11Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13
e10 0.540.610.660.680.710.730.730.740.740.71
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