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ON Semiconductor Corp (NAS:ONNN)
E10
\$0.23 (As of Dec. 2014)

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.

ON Semiconductor Corp's adjusted earnings per share data for the three months ended in Dec. 2014 was \$0.004. 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 \$0.23 for the trailing six years ended in Dec. 2014.

As of today, ON Semiconductor Corp's current stock price is \$11.80. ON Semiconductor Corp's E10 for the trailing six years ended in Dec. 2014 was \$0.23. ON Semiconductor Corp's Shiller P/E Ratio of today is 51.30.

During the past 13 years, the highest Shiller P/E Ratio of ON Semiconductor Corp was 838.00. The lowest was 23.96. And the median was 42.76.

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, ON Semiconductor Corp's adjusted earnings per share data for the three months ended in Dec. 2014 was:

 Adj_EPS = Earnigns per Share / CPI of Dec. 2014 * CPI of Current = 0.004 / 234.812 * 233.808 = 0.004

Since most companies do not have as long as 10 years history, GuruFocus uses 6 years to do the calculation.

Current CPI = 233.808.

ON Semiconductor Corp Quarterly Data

 201209 201212 201303 201306 201309 201312 201403 201406 201409 201412 per share eps 0.03 -0.308 0.05 0.11 0.110 0.064 0.130 0.200 0.090 0.004 CPI 231.407 229.601 232.773 233.504 234.149 233.049 236.293 238.343 238.031 234.812 Adj_EPS 0.03 -0.314 0.05 0.11 0.110 0.064 0.129 0.196 0.088 0.004 201003 201006 201009 201012 201103 201106 201109 201112 201203 201206 per share eps 0.14 0.18 0.2 0.133 0.080 0.070 -0.110 -0.020 0.060 0.020 CPI 217.631 217.965 218.439 219.179 223.467 225.722 226.889 225.672 229.392 229.478 Adj_EPS 0.15 0.193 0.214 0.142 0.084 0.073 -0.113 -0.021 0.061 0.020 200903 200906 200909 200912 per share eps -0.08 -0.01 0.07 0.144 CPI 212.709 215.693 215.969 215.949 Adj_EPS -0.088 -0.011 0.076 0.156

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.

ON Semiconductor Corp's Shiller P/E Ratio of today is calculated as

 Shiller P/E Ratio = Share Price / E10 = 11.80 / 0.23 = 51.30

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

During the past 13 years, the highest Shiller P/E Ratio of ON Semiconductor Corp was 838.00. The lowest was 23.96. And the median was 42.76.

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.

ON Semiconductor Corp Annual Data

 Dec05 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 e10 0.00 -1.18 -0.12 -0.14 0.04 0.27 0.24 0.06 -0.04 0.23

ON Semiconductor Corp Quarterly Data

 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 e10 0.16 0.06 0.03 0.01 -0.01 -0.04 -0.02 0.00 -0.02 0.23
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